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apple mentioned Earnings for the second fiscal quarter On Thursday it beat weak expectations on Wall Street, spurred by stronger-than-expected iPhone sales. Apple CEO Tim Cook told CNBC that the quarter was “better than we expected.”
However, Apple’s overall sales declined for the second straight quarter. Shares of Apple were up nearly 2% in extended trading, continuing to climb when Apple gave forecast data points around the current quarter.
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Here’s how the company performed versus Wall Street’s expectations, according to the Refinitiv consensus forecast:
- EPS: $1.52 vs $1.43 expected
- he won: 94.84 billion dollars, compared to the expected 92.96 billion dollars
- gross profit margin: 44.3% vs. 44.1% expected
Apple reported a net profit of $24.16 billion for the quarter, compared to $25.01 billion a year ago. Overall revenue is down 3% from last year’s sales of $97.28 billion.
Here’s how Apple’s individual product lines perform against StreetAccount consensus expectations:
- iPhone revenue: 51.33 billion dollars, compared to the expected 48.84 billion dollars
- Mac revenue: 7.17 billion dollars, compared to the expected 7.80 billion dollars
- iPad revenue: 6.67 billion dollars, compared to the expected 6.69 billion dollars
- Other product revenue: 8.76 billion dollars, compared to the expected 8.43 billion dollars
- Service revenue: 20.91 billion dollars, compared to the expected 20.97 billion dollars
Apple has not provided official guidance, continuing its practice dating back to 2020 and the start of the Covid-19 pandemic. Management usually provides some data points on a call with analysts.
Apple CFO Luca Maestri said that Apple expects overall revenue in the current quarter to decline by about 3%.
“We expect quarterly revenue performance for the month of June to be similar to the March quarter, assuming the macroeconomic outlook does not deteriorate from what we expect today for the current quarter,” Maestri said on an analyst conference call. Maestri added that the company faces macroeconomic challenges in digital advertising and mobile gaming, which are part of Apple’s services business.
The highlight of Apple’s report was iPhone sales, which grew from a year ago quarter even as the broader smartphone industry contracted nearly 15% over the same time, IDC estimates.
iPhone revenue grew 2% during the quarter, indicating that parts shortages and supply chain problems that have hampered the product over the past few years, including the iPhone factory shutdown late last year, are finally easing.
“It was a good quarter from an iPhone standpoint, especially for the market when you look at the market stats,” Cook told CNBC’s Steve Kovac.
Apple CEO (Chief Executive Officer) Tim Cook waves to people during the opening of the first Apple Inc. flagship store. In Mumbai, India on April 18, 2023.
Imtiaz Sheikh | Anadolu Agency | Getty Images
The Apple Mac and iPad business didn’t fare as well. The company warned last quarter that both business segments would decline in part due to parts shortages, but they fell more than expected.
Apple’s Mac business fell more than 31% to just over $7.17 billion. But it’s a tough comparison compared to the same time last year when Apple was still cashing in on the end of the pandemic boom in PC sales and switching to its own chips that provide longer laptop battery life.
“There are two real reasons for that,” Cook said. “One is the overall situation overall. The other is where we’re still juxtaposing the very tough comparison between the M1 MacBook Pro 14 and 16-inches from last year’s quarter.”
Revenue from iPads decreased about 13% to $6.67 billion.
Apple’s services business includes monthly subscriptions, revenue from the Apple App Store, warranties, and search licensing revenue from companies like Google. Apple reported $20.9 billion in services revenue, up 5.45% year-over-year, which shows that the company’s higher-margin business line is growing.
Apple’s wearables division, including the Apple Watch and headphones like the AirPods, fell 1% during the quarter, beating analysts’ expectations. Last fall, Apple released an expensive Apple Watch, called the Ultra.
Apple’s larger business in China, which includes Taiwan and Hong Kong in addition to the mainland, reported sales of $17.81 billion, down from $18.34 billion last year. Analysts had hoped China’s electronics demand would pick up this year as the company emerges from Covid-era lockdowns and other restrictions.
While sales shrank in most of the regions Apple watches, in Asia Pacific it grew to $8.11 billion.
Cook was optimistic about Apple’s prospects in India. Cook visited India last month to open Apple stores and meet politicians.
“The converter and first-time buyer metrics look very good there for India,” Cook said. Apple uses the term “switcher” to refer to first-time iPhone buyers who previously had Android devices.
As expected, Apple’s board of directors authorized a $90 billion stock and dividend buyback. Apple said it paid $23 billion in buybacks and dividends in the March quarter. Apple also raised its dividend by 4%, to 24 cents a share.
Cook also said that Apple is not planning layoffs like those other big tech companies have begun over the past year.
“My view is that this is a last resort, and so mass layoffs is not something we’re talking about at this moment,” Cook said.
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