When Apple reported its December quarter earnings on Thursday, it revealed that China sales had dropped 11.1% on an annual basis.
It was the worst quarter by growth rate since the December quarter a year ago, and marks the sixth straight quarter of declines in Apple’s third-largest region by revenue.
Ahead of Apple earnings, analysts had been fretting about exactly this issue. They cited supply chain checks in the country suggesting weak demand and an overall impression that the Chinese consumer was starting to favor locally made devices from companies such as Huawei and Xiaomi over the iPhone.
China is “the most competitive market in the world,” Cook told analysts on Thursday. In 2024, Apple was third in market share in China, behind Vivo and Huawei, according to an IDC estimate from this week.
When Cook was asked about the company’s performance in China on Thursday by CNBC’s Steve Kovach and analysts on the earnings call, he focused less on the competition and more on how the company’s operations decisions affected China sales.
Cook said there were a few things to keep in mind about the company’s 11.1% decrease in the quarter.
Most notably, Cook cited Apple Intelligence’s absence in China and Chinese affecting sales. He added that the company’s suite of artificial intelligence features for the iPhone 16 had bolstered iPhone sales in the U.S. and other countries where it’s available.
“During the December quarter, we saw that in markets where we had rolled out Apple Intelligence, that the year-over-year performance on the iPhone 16 family was stronger than those markets where we had not rolled out Apple intelligence,” Cook said.
The company’s AI software is only available in English for now, but Apple will release a simplified Chinese version in April, Apple said Thursday. That doesn’t necessarily mean Apple Intelligence will launch in China that month, but it does mean Chinese speakers elsewhere will get to test out Apple’s AI.
“Until we get through the regulatory process, nothing is certain, and we’re going through it now,” Cook told CNBC.
He added that the company is looking for a local partner that is licensed by the country to offer their AI to handle tricky or complicated questions, like OpenAI’s ChatGPT does in the U.S.
“There are a number of Chinese companies that do have licenses to operate locally,” Cook said. “What we have to do is choose one and work with them on the integration, just like OpenAI.”
About half of the China revenue decline was because the company had misread demand in the country, Cook said. That led to a “channel inventory” issue. Apple uses the phrase “channel” to describe companies like wireless carriers and retailers that sell Apple devices.
“My point was that our channel inventory reduced from the beginning of the quarter to the end of the quarter, and that was over half of the reduction in the reported results,” Cook said. “Part of the reason for that is that our sales were a bit higher than we forecasted them to be, toward the end of the quarter.”
Apple ended the quarter “a little leaner” in inventory in the country than the company had expected to, said Cook, who also pointed to a nationwide subsidy program that could effectively reduce the cost of some Apple products in the country.
“There is now a national subsidy program that launched on Jan. 20, on categories that some of our products are a part of. It’s a fiscal stimulus, kind of,” Cook told CNBC.
The Chinese government introduced subsidy policies last year to boost consumption and domestic demand, according to analyst firm Canalys. Smartphones were added to the list of eligible products earlier this month. The subsidy is capped at 500 yuan per product, and models that cost over 6,000 yuan, such as Apple’s Pro phones, aren’t eligible.
On the earnings call Thursday, Cook said that some of Apple’s products including smartphones, tablets, PCs and smartwatches would be covered by the subsidy.
“We do see fiscal stimulus occurring, and we’ll be glad to talk about what that looks like on the next call,” Cook said.
Oracle’s Federal Electronic Health Record experienced a nation-wide outage on Tuesday, the Department of Veterans Affairs confirmed to CNBC.
The agency said “all users” of the company’s Federal EHR, including the VA, the Department of Defense, the U.S. Coast Guard and the National Oceanic and Atmospheric Administration, were impacted. Six VA medical centers, 26 community clinics, and remote VA sites experienced disruptions, the agency said.
“Affected VA medical facilities followed standard contingency procedures during the outage to ensure continuity of care for Veterans,” a VA spokesperson said in a statement Thursday.
An electronic health record, or an EHR, is a digital version of a patient’s medical history that’s updated by doctors and nurses. It’s crucial software within the U.S. health-care system, and outages can cause serious disruptions to patient care.
Oracle is one of the largest EHR vendors thanks to it’s $28 billion acquisition of the medical records giant Cerner in 2022.
The company’s Federal EHR initially started experiencing issues at around 8:37 a.m. Eastern on Tuesday, the VA said. Users reported that the software froze and they were unable to access applications. Access was restored and cleared by 2:05 p.m. Eastern that day after Oracle restarted the system.
Oracle is carrying out an investigation to determine what caused the outage, the VA said. Oracle did not immediately respond to CNBC’s request for comment.
The outage marks Oracle’s latest stumble in a thorny, years-long EHR rollout with the VA, which has been marred by patient safety concerns. The agency launched a strategic review of Cerner in 2021, before Oracle’s acquisition, and it temporarily paused deployment of the software in 2023.
Four VA facilities in Michigan are slated to deploy Oracle’s Federal EHR in 2026.
In October, Oracle unveiled a brand-new EHR equipped with fresh cloud and artificial intelligence capabilities. The early adopter program for the software begins this year, though it’s not clear if the VA has plans to utilize it.
Oracle is slated to report third-quarter fiscal 2025 earnings on Monday.
Broadcom reported first-quarter earnings on Thursday that topped analysts’ expectations, and the chipmaker offered strong guidance for the current quarter. The stock jumped 16% in extended trading.
Here’s how the company did versus LSEG consensus estimates:
Earnings per share: $1.60 adjusted vs. $1.49 expected
Revenue: $14.92 billion vs. $14.61 billion expected
Broadcom said it expects about $14.9 billion in second-quarter revenue, higher than the $14.76 billion forecast by Wall Street analysts. Revenue in the last quarter rose 25% from $11.96 billion a year earlier.
The company said net income increased to $5.5 billion, or $1.14 per share, from $1.33 billion, or 28 cents per share, in the same period last year.
Broadcom’s artificial intelligence business is at the center of the company’s recent boom, which saw its stock price more than double last year. The company is one of the primary data center infrastructure vendors for AI, working both on Google’s custom AI chips as well as providing essential components for networking thousands of other chips together to develop advanced AI software.
Prior to the after-hours pop, the stock was down about 23% so far in 2025, as investors rotate out of risk partly due to concern about President Donald Trump’s tariffs.
Broadcom said it recorded $4.1 billion in AI revenue during the first quarter, which is 77% higher on a year-over-year basis. Those sales are reported as part of Broadcom’s semiconductor solutions business, which grew 11% on an annual basis to $8.21 billion during the quarter.
Broadcom CEO Hock Tan said in a statement that the company expects “continued strength in AI semiconductor revenue,” reaching a projected $4.4 billion in the second quarter.
In December, Broadcom said it was developing custom AI chips with three large cloud customers. Tan said on Thursday that in addition to those customers, it had “deeply engaged” with two other hyperscalers, and are working with four other potential customers to develop their own custom AI chips.
Tan said that Broadcom closely chooses partners for developing custom AI chips who can deploy the resulting product in large quantities. “To put it bluntly, we don’t do it for startups,” Tan said.
The other major part of Broadcom’s revenue comes from its infrastructure software division, which includes software from the company’s acquisition of VMware in the fourth fiscal quarter of 2023. Broadcom said it saw $6.7 billion in software sales during the quarter, a 47% increase on an annual basis.
Antonio Neri, CEO of Hewlett Packard Enterprise, speaks during an interview with CNBC on the floor of the New York Stock Exchange (NYSE) in New York City, October 20, 2023.
Brendan McDermid | Reuters
Hewlett Packard Enterprise shares slid 19% in extended trading on Thursday as the data center equipment maker issued quarterly and full-year guidance that came in below consensus.
Here’s how the company did in the fiscal first quarter in comparison with LSEG consensus:
Earnings per share: 49 cents adjusted vs. 49 cents expected
Revenue: $7.85 billion vs. $7.82 billion expected
HPE’s revenue rose 16% year over year in the quarter ending on Jan. 31, according to a statement. The company was left with profit of $598 million, or 44 cents per share, up from $387 million, or 29 cents per share, in the same quarter a year earlier. The adjusted earnings per share excludes stock-based compensation.
“We could have executed better,” CEO Antonio Neri said on a conference call with analysts. The company had higher than normal inventory for artificial intelligence servers because of a shift to next-generation Blackwell graphics processing units from Nvidia.
The backlog for AI systems rose 29% quarter over quarter to $3.1 billion. Total server revenue totaled $4.29 billion.
HPE dealt with extensive discounting in the market while selling traditional servers during the quarter, finance chief Marie Myers said. As the quarter progressed, HPE moved to limit travel and discretionary spending, she said.
“We expect pricing adjustments may negatively impact top-line growth in the near term,” Myers said.
The company said it would implement a cost-cutting program involving layoffs over the next 18 months that will lead to $350 million in gross savings by the 2027 fiscal year. Around 2,500 employees will be affected, a spokesperson said, representing about 5% of the workforce when also factoring in expected attrition. At the end of October, HPE employed 61,000 people, according to its most recent annual report.
In January, the U.S. Justice Department filed in a federal district court to stop HPE from acquiring Juniper Networks. HPE announced the proposed $14 billion deal in January 2024. The court expects a trial to begin in July, according to the statement. The deal should close by October 2025, HPE said. In December, the company had said the transaction would be done in early 2025.
HPE called for 28 cents to 34 cents in adjusted earnings per share for the fiscal second quarter, with revenue coming in between $7.2 billion and $7.6 billion. Analysts surveyed by LSEG had looked for 50 cents per share on $7.93 billion in revenue.
For the 2025 fiscal year, HPE sees $1.70 to $1.90 in adjusted earnings per share. Analysts polled by LSEG had predicted $2.13 per share.
HPE expects to update its prices to reflect higher expenses from U.S. tariffs, Neri said, adding that he has not perceived any business deterioration from President Donald Trump’s so-called Department of Government Efficiency.
As of Thursday’s close, HPE shares were up about 2% so far in 2025, while the S&P 500 index was down 2%.