Apple’s results beat expectations on Thursday, thanks to better-than-expected showing the tech giant’s resilience in a slowing global economy iphone Sales and significant penetration in India and other new markets.
Shares of the largest US company by market value rose 2 percent Apple April 1 Surpassed Wall Street’s expectations for revenue and profit for the quarter. The company’s results contrasted with disappointing data from big chip makers due to a slower-than-expected return to China’s economic growth.
Apple executives said Thursday that the gross profit margin for the current quarter will be better than forecast despite an expected decline in revenue as supply-chain issues improve.
Apple said sales for its second quarter ended April 1 fell 2.5 percent to $94.8 billion (roughly Rs. 7,74,400 crores), ahead of expectations for a 4.4 percent decline, according to Refinitiv data. Profit was flat at $1.52 (roughly Rs. 120) per share, compared with estimates of $1.43 (roughly Rs. 115) per share.
IPhone sales rose 1.5 percent to $51.3 billion (roughly Rs. 4,19,100 crores), beating expectations for a 3.3 percent decline, even as consumers and businesses tightened spending due to rising inflation. Global smartphone shipments are set to decline by 13 percent during the first three months of 2023, according to research firm Canalys, which says Apple gains market share against Android rivals.
Chief financial officer Luca Maestri said Apple’s gross margin would be between 44 percent and 44.5 percent, up from estimates of 43.7 percent, according to Refinitiv data. But he also said that Apple’s revenue is likely to decline slightly. Analysts were expecting a 2.1 percent rise in revenue to $84.7 billion (roughly Rs. 6,92,000 crores) for the company’s June-ended fiscal third quarter.
Apple stock has outperformed most of Wall Street in 2023, up 28 percent year-to-date. Investors view the company as a defensive play in times of economic uncertainty.
Apple raised its dividend to 24 cents per share from 23 cents a year ago. The board authorized a share repurchase program of $90 billion (roughly Rs. 7,35,200 crores), the same as a year ago.
Outperformance of emerging markets
Apple CEO Tim Cook Apple told Reuters in an interview on Thursday that the company set a fiscal second-quarter record for iPhone sales, thanks to picking up new users in markets such as India, where Cook recently spoke at the opening of that country’s first Apple Store. Traveled for
“We are thrilled with our performance in emerging markets,” Cook said. “We set records for iPhone installed base in every geographic segment, and we had very strong ‘new’ (sales) in emerging markets, particularly Brazil, India and Mexico.”
Cook also said that supply-chain problems have disappeared. “We had no material shortages during the quarter in any product.”
Not all of Apple’s business lines were immune to the electronics downturn. Mac sales declined sharply while iPad revenue declined. Sales in China also fell 2.9 percent, a slightly larger decline than overall revenue.
“Apple still needs China on a near-term basis to drive sales and profits,” said Tom Forte of DA Davidson. “Longer term, emerging markets are important, especially India from a supply chain and sales perspective.”
Other tech firms predict a second-half rebound. Wall Street expects Apple to make a rapid recovery and show modest revenue growth year-over-year during its fiscal third quarter ending in June.
Investors are still waiting for the company’s next major hardware product. Bloomberg has reported that the iPhone maker could unveil a mixed-reality headset as soon as it holds its annual software developer conference next month. The company recently announced new service businesses such as high-yield savings accounts.
Mac sales fell more than 30 percent, compared to analyst estimates of a 25 percent decline, according to Refinitiv. Apple’s sales fared only slightly better than PC unit shipments in the market, which fell 33 percent in the calendar first quarter, according to Canalys.
Sales in Apple’s wearables business, which includes devices such as AirPods And this apple watchfell less than 1 percent compared to estimates for a 4.4 percent decline.
Apple’s biggest growth segment was its services business, which includes products like iCloud and big pay, which grew by 5.5 percent to $20.9 billion (roughly Rs. 1,70,700 crores). Cook said Apple now has 975 million customers on its platform, up from 935 million last quarter and an increase of 150 million from a year ago, which includes both Apple services and third-party apps.
© Thomson Reuters 2023
(This story has not been edited by NDTV staff and was auto-generated from a syndicated feed.)