Gene Munster Says Apple's 'Mess Wasn't As Big As It Looked' As iPhone Maker Delivers Better Than Expected Results

Apple Inc. (NASDAQ:AAPL) delivered better-than-expected fiscal first-quarter results, with Deepwater Asset Management‘s Gene Munster suggesting the quarter wasn’t as disappointing as initial numbers indicated, citing channel inventory adjustments and forward guidance as key factors.

What Happened: The tech giant reported revenue of $124.3 billion, slightly exceeding analyst estimates of $124.13 billion, while earnings per share came in at $2.40, above the expected $2.36. Despite these beats, iPhone sales showed some weakness, particularly in China.

Munster, analyzing the results on X, pointed to channel inventory adjustments as a significant factor in the apparent slowdown. “The mess wasn’t as big as it looked in the numbers,” he noted, explaining that about half of the weakness in China, where revenue declined 11%, was attributable to inventory management rather than underlying demand issues.

“I still believe Apple Intelligence will reaccelerate iPhone sales starting in June based on early uptake data in the US,” Munster said.

The company’s installed base reached a new all-time high across all products and geographic segments, with CEO Tim Cook highlighting the role of Apple silicon in unlocking new possibilities through Apple Intelligence. Services revenue showed particular strength, growing to $26.34 billion from $23.12 billion year-over-year, representing about 20% of total sales.

Looking ahead, Munster expressed optimism about iPhone sales reaccelerating by June, based on early adoption data in the U.S. He emphasized the strength of Apple’s ecosystem, noting the 7% growth in the installed base to 2.2 billion devices.

Why It Matters: However, challenges remain in China, where local competition and shifting consumer preferences toward domestic brands pose ongoing concerns. Despite these headwinds, Apple’s guidance for the March quarter suggests approximately 5% revenue growth, which Munster views as encouraging given the inventory adjustments in the previous quarter.

Price Action: Apple’s stock closed on Thursday at $237.59, down 0.74% for the day. However, in after-hours trading, the stock price rose by 3.01%, according to data from Benzinga Pro.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.