On Thursday, Apple provided more evidence for optimists who believe the worst of the tech industry’s slump may be over, while reminding investors that there is still plenty to worry about.
Although the company said its revenue was down 3 percent in its most recent quarter compared to the same period a year earlier, the total of $94.8 billion far exceeded investor expectations of $92.9 billion.
It was something of a rebound from the previous quarter, when Apple’s revenue and profit fell more substantially due to economic challenges and a Covid-19 outbreak in China that forced the company’s largest iPhone factory to temporarily close. company.
Apple reported a profit of $24.1 billion, down 3 percent from the same period a year earlier, but above the $22.6 billion Wall Street expected. The company’s sales in its fiscal second quarter were boosted by record revenue from its services division and strong demand for iPhones, its flagship product.
“Apple’s results suggest to us that the company is navigating well in a challenging macroeconomic environment,” said Tom Forte, an analyst at DA Davidson. Still, he said, Big Tech’s collective financial results served as a reminder that the economy isn’t out of the woods yet.
Apple made $51.3 billion from iPhone sales, up 1.5 percent from a year ago. Demand for iPhones and other products in China dipped slightly from a year earlier, but revenue of $17.8 billion beat investors’ expectations as China continued to recover from lengthy pandemic lockdowns. Emerging markets such as South Asia, India, Latin America and the Middle East drove demand for the iPhone, Luca Maestri, Apple’s chief financial officer, said on a call with investors.
Tim Cook, Apple’s chief executive, said on the call that the company’s supply of iPhones had rebounded after various problems, many related to the pandemic.
“If you take a step back and look at how we’ve performed over the last three years in the supply chain, despite this parade of horrible things, between the pandemic and the chip shortage and macroeconomic factors, the supply chain has been incredibly resilient.” he said.
Customer interest in Apple products other than the iPhone plummeted in the quarter. iPad revenue fell nearly 13 percent and Mac revenue fell 31 percent. Cook said the slowdown was due to economic challenges and difficult comparisons with a high-demand quarter last year.
Still, Apple’s services division, which includes Apple Fitness+ and Apple Music subscriptions as well as sales from its App Store, had nearly $21 billion in sales, a slight increase from a year earlier that propelled the company higher. general. Revenue from the App Store, Apple Music, iCloud and Apple Pay services rose, in particular, while digital advertising and mobile games struggled, the company said on the call.
Apple also said it had authorized a $90 billion worth of share buybacks, helping lift the company’s share price more than 1 percent in after-close trading on Thursday.
The company hasn’t carried out mass layoffs like other tech companies, because it didn’t hire as aggressively in the early days of the pandemic. Apple has taken a hard line on its return-to-office policies, requiring most employees to work in the office three days a week.