Apple’s revenue rose slightly on the back of sales of its iPhone and services division despite difficulties caused by supply chain shortages and factory closures in China.
The iPhone maker said revenue rose 2% from a year ago to $83 billion, slightly above analyst forecasts of $82.8 billion, according to Refinitiv.
Apple in April, warned of up to $8 billion in setbacks related to supply and production problems for the quarter. But chief financial officer Luca Maestri told the Financial Times those costs ended up being just under $4 billion and would improve in the current quarter.
“The supply situation is improving,” he said. “The big question mark, as always, is the potential limitations of Covid, but in the current environment, if nothing changes, we expect the supply constraints to be less than what we have seen. seen in June”.
Earnings per share for the quarter fell 8% to $1.20, beating forecasts of $1.15. Net profit fell 10% to $19.4 billion, above the $19 billion forecast.
Apple’s stock is down about 13.6% year-to-date amid wider tech sell-off3% rebound in after-hours trading.
“Credit should be given to [chief executive Tim] Paolo Pescatore, analyst at PP Foresight, says the way he has led the company over the past few years. “The company is very well positioned to weather any storm, in stark contrast to other companies.”
Executives say Apple’s most important product is thriving. Its iPhone sales, which account for 49% of total revenue, rose 3% to $40.7 billion. Cook said the June quarter saw a “record” number of people switching to iPhones from Android.
“For the iPhone, we don’t see any signs of weakening demand from the macro environment other than foreign exchange,” said Maestri. “We believe demand continues to be very strong but we don’t have enough supply to meet that demand.”
Maestri noted that Apple generated nearly $23 billion in operating cash flow and returned more than $28 billion to shareholders through dividends and share buybacks.
Maestri said Apple’s “installed device base” — which includes iPhones, iPads and other hardware — hit an all-time high for “all major product categories,” though he denied it. provide a specific number. In January, that number totaled 1.8 billion.
That boosted revenue at Apple Services — a high-margin division that houses App Store and digital media purchases — 12% to $19.6 billion, less than a quarter. slightly below expectations of $19.7 billion. According to Apple’s report, the number of people paying recurring subscription fees to Apple on its services is 860 million, an increase of 160 million over the past 12 months.
Mac revenue fell 10% to $7.4 billion from a year ago. iPad sales also fell 2% to $7.2 billion, and wearables, such as the Apple Watch and AirPods, fell 8% to $8 billion.
Cook laments “a cocktail of headwinds” holding back wearable devices, including stronger dollarsupply constraints and Apple’s decision to withdraw from Russia.
Apple also cites a “deceleration” in its ad business, days after Meta, Snap, Twitter and YouTube all investors are disappointed.
Analysts at Bernstein had previously warned that fiscal 2023 revenue estimates could be too high if the overall economy continues to falter.
“Apple is consumer-centric and highly transactional, with less than 10% of its sales and profits – meaning it could be vulnerable to a recession,” they wrote.
