SAN FRANCISCO: Apple Inc said on Thursday (May 4) iPhone sales and money made from services powered quarterly earnings that beat forecasts despite inflation pressure and the slowing global economy.
The Silicon Valley titan reported profit of US$24 billion (RM108.6 billion) on revenue of US$94.8 billion in the first three months of this year.
“We are pleased to report an all-time record in services and a March quarter record for iPhone despite the challenging macroeconomic environment,” Apple chief executive Tim Cook said in an earnings release.
Sales of iPhones tallied US$51.3 billion in the quarter, topping the same period a year earlier, according to earnings figures.
Analysts said this was due at least in part to the reopening of China after a long period of covid restrictions hurt economic activity.
Though Apple has made noise with its expansion into India, China remains the iPhone maker's crucial supplier and a key market.
Apple was deeply affected by the years of Chinese covid-related closures and is only now seeing its complex supply chain returning to normal.
Overall revenues for the period declined, though this was expected and Apple’s shares were up about one percent in after-market trades.
Sales of Macs slipped to about US$7.2 billion as belt-tightening around the world hit the entire personal computer market.
Shipments of Apple Mac computers, which are in the premium segment of the market, shrank more than 40% in the quarter, research firms IDC and Canalys have reported.
Even though iPhones have been the heart of Apple’s money-making machine, the company has made a priority of bringing in more revenue from content and services sold to users of its devices.
Apple said revenue from services stood at US$20.91 billion, defying expectations that demand for streaming entertainment would fall with the end of restricted life due to the Covid pandemic.
Meanwhile, Apple forecast gross margins above Wall Street expectations despite predicting a slight fall in revenue in the company's current fiscal third quarter.
Chief financial officer Luca Maestri said Apple’s gross margin will be between 44% and 44.5%, above estimates of 43.7%, according to Refinitiv data. But he also said Apple’s revenue will likely decline slightly. Analysts were expecting a 2.1% increase to US$84.7 billion for the company's fiscal third quarter that ends in June.
For the moment investors seemed satisfied, with shares rising about 2% in after-hours trading after the forecast.
Apple’s stock has outperformed most of Wall Street in 2023, up 28% year-to-date, with investors seeing the world's most valuable company as a defensive play during a time of economic uncertainty.
Cook told Reuters in an interview on Thursday that the company set a fiscal second-quarter record for iPhone sales, thanks in part to picking up new users in markets such as India, where he recently travelled to for the opening of the company’s first retail stores in the country.
“We were thrilled by our performance in emerging markets,” Cook said. “We set records for the iPhone installed base in every geographic segment, and we had very strong ‘new to’ (sales in) emerging markets, particularly in Brazil, India and Mexico.”
He also said supply-chain snarls have vanished.
“We had no material shortages at all during the quarter across any of the products,” he said. – AFP, Reuters