By Reuters IST (Published)
Mini
The forecast for the holiday quarter was more grim.
Apple Inc. 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 fluctuated in afterhours trading.
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. Like Facebook and Snap, Apple is seeing softness in advertising spending.
The forecast for the holiday quarter was more grim. While not providing specific numbers, Apple said revenue would decelerate in the December quarter and be negatively impacted by foreign exchange rates.
The rising US dollar has hit many companies such as Apple that generate substantial foreign revenue and are getting less cash back when they convert it.
Overall, Apple said quarterly revenue rose 8 percent 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.
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 percent for the just-ended quarter, its third consecutive decline of the year, according to Canalys data.
Masters said iPhone sales set a record for the September quarter, improving 10 percent 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.
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.
Apple said its gross margin of 43.3 percent was a record for the September quarter.
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, though 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.
Apple said it now has 900 million paying subscribers to its services, up from the previous quarter’s 860 million.
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