Consumer electronics giant Apple (AAPL) reported fiscal third-quarter earnings that beat Wall
Street expectations despite worsening economic conditions around the world.
The Silicon Valley-based company reported earnings per share (EPS) of $1.20 U.S. versus
$1.16 U.S. that had been estimated by analysts. Revenue in the quarter totaled $83 billion U.S.
versus $82.81 billion U.S. that was estimated.
Revenue from iPhone sales amounted to $40.67 billion U.S. compared to $38.33 billion U.S.
that was expected on Wall Street. The company’s gross margins stood at 43.26% in the latest
quarter compared to an estimate of 42.61%.
As has been the case since the pandemic began in 2020, Apple did not provide any forward
guidance. However, chief executive officer (CEO) Tim Cook said in a media interview that “We
expect revenue to accelerate in the September quarter despite seeing some pockets of
softness.”
Cook also said that Apple is feeling the impact of inflation but plans to continue making
investments this year and into 2023.
The latest quarterly print suggests that demand for iPhone 13 models remains strong even in
the second half of the product’s annual release cycle. Apple releases new iPhones in
September each year, and sales tend to decline as customers anticipate new models being
issued.
Apple’s services business was the fastest growing segment for the company during the quarter,
rising 12%. It includes monthly subscriptions, payment fees, licensing fees from Google, and
revenue from the iPhone App Store.
Apple said it has 860 million current paid subscriptions, which includes anyone who subscribes
to an app sold on its App Store and products such as Apple Music and iCloud.
Apple’s other products segment, which includes AirPod headphones, Apple Watches, and
HomePod speakers declined 8% year-over-year and missed Wall Street expectations.
Also, Apple’s business in China decreased 1% on an annual basis to $14.6 billion U.S. as that
country implemented new COVID-19 restrictions during the quarter.
Apple said in its earnings release that it spent more than $28 billion U.S. on share buybacks and
dividends during its fiscal third quarter.
Apple’s stock is down 14% this year at $157.35 U.S. per share.
