Oct 27 (Reuters) – Apple Inc (AAPL.O) on Thursday reported revenue and profit that topped Wall Street targets, one of the few bright spots in a tech sector battered by spending cutbacks due to inflation.
Apple was saved by its oldest technology, its laptop computers, while its star, the iPhone, stumbled.
Although iPhone sales were not as strong as some analysts had targeted, they were still a record for the September quarter. Mac sales of $11.5 billion were far ahead of analyst estimates of $9.36 billion.
Shares were trading down less than 1% in after-hours trade.
Apple’s results showed some resilience in the face of a weak economy and strong US dollar that has led to disastrous reports from many tech companies.
Overall, Apple said quarterly revenue rose 8% to $90.1 billion, above estimates of $88.9 billion, and net profit was $1.29 per share, topping with the average analyst estimate of $1.27 per share, according to Refinitiv data.
“We did better than we anticipated, in spite of the fact that foreign exchange was a significant negative for us,” said Chief Financial Officer Luca Maestri.
Minutes before Apple reported, Amazon.com AMZN.O added to tech sector misery, predicting a holiday profit slump that sent its shares down 20%.
Apple’s iPhone sales for the company’s fiscal fourth quarter rose to $42.6 billion, when Wall Street expected sales of $43.21 billion, according to Refinitiv IBES. By contrast, the overall global smartphone market dropped 9% for the just-ended quarter, its third consecutive decline of the year, according to Canalys data.
Maestri said iPhone sales set a record for the September quarter, improving 10% over the previous year’s quarter and exceeding the company’s forecast.
“The iPhone number is a hint of the turmoil and uncertainty in the market, but Apple has different ways to offset,” said Runar Bjorhovde, a research analyst at market research firm Canalys.
JP Morgan analyst Samik Chatterjee had noted early lackluster demand for base models of the newly introduced iPhone 14s, but robust consumer appetite for the high-end devices, reflecting Apple’s relatively affluent customer base. He warned that weaker consumer spending could impact earnings next fiscal year.
Sales of Apple’s Mac computers received a boost from this summer’s introduction of redesigned MacBook Air and MacBook Pro laptops. New tablets went on sale this week.
Maestri said the robust sales also reflected a backlog of orders, caused by a prolonged shutdown at one of the factories that produces Macs, which the Apple was able to fill in the quarter.
The company reported sales of iPads were $7.2 billion, compared with the average estimate of $7.94 billion.
Apple wearables such as AirPods and other accessories notched sales of $9.7 billion, slightly ahead of the Wall Street forecast of $9.2 billion.
“Similar to iPhones, we expect the macro impacts to units to creep into the higher end at some point,” wrote Barclays hardware analyst Tim Long ahead of the results.
Growth in the company’s services business, which has buoyed sales and profits in recent years, saw a rise to $19.2 billion in revenue, below the estimate of $20.10 billion.
Maestri said Apple experienced softness in digital advertising, as have others in the sector.
“Like other major tech companies, even Apple is suffering from the negative impact of a worsening macro backdrop and ongoing supply chain woes, although it has done a better job of navigating through the challenging environment,” Jesse Cohen, senior analyst at Investing.com .
In China, which has experienced a sharp economic slowdown, Apple reported fourth-quarter sales of $15.5 billion. That is a gain from the previous quarter, when Apple logged sales of $14.6 billion.
Read more:
Meta stock craters over bleak forecast and expensive metaverse bets
Alphabet’s miss fans inflation fears across digital advertising
Samsung defies chip downturn with aggressive supply and capex plans
Cloud to PCs, Microsoft forecasts spook investors as economy bites
Reporting by Dawn Chmielewski in Los Angeles and Nivedita Balu in Bengaluru; Editing by Peter Henderson and Lisa Shumaker
Our Standards: The Thomson Reuters Trust Principles.
.