Thursday’s results showed Apple Inc.’s (AAPL.O) resiliency in a slowing global economy thanks to better-than-expected iPhone sales and substantial breakthroughs in India and other fresh regions.
Apple shares jumped 2% after beating Wall Street’s revenue and profit projections for the April 1 quarter. However, due to China’s delayed economic recovery, large chipmakers’ performance lagged behind the company’s.
As supply-chain issues have improved, Apple executives said Thursday that gross profit margins for the current quarter would be better than expected despite a revenue drop.
Apple’s fiscal second-quarter revenue declined 2.5% to $94.8 billion, beating Refinitiv’s 4.4% forecast. Profit was $1.52 per share, compared to $1.43 per share expected.
IPhone sales rose 1.5% to $51.3 billion, above predictions for a 3.3% dip. However, Canalys said global smartphone shipments declined 13% in the first three months of 2023. Apple gained market dominance over Android rivals.
According to CFO Luca Maestri, Apple’s gross margin will be between 44% and 44.5%, above Refinitiv’s 43.7% expectation. He said that Apple’s revenue may drop marginally. The company’s June-ending fiscal third quarter was expected to rise 2.1% to $84.7 billion.
Apple’s stock is up 28% in 2023, beating Wall Street. Investors view the firm as a defensive option during economic instability.
Apple upped its dividend to 24 cents from 23 cents a year earlier. In addition, like last year, the board authorized a $90 billion share repurchase program.
In an interview with Reuters on Thursday, Apple CEO Tim Cook said the company established a fiscal second-quarter record for iPhone sales, partly due to new customers in India, where Cook recently opened the country’s first Apple shops.
“We were thrilled by our performance in emerging markets,” Cook added. “We set records for the iPhone installed base in every geographic segment, and we had very strong ‘new to’ (sales in) emerging markets, particularly Brazil, India, and Mexico.”
Cook claimed supply-chain snarls are gone. “No product had material shortages during the quarter.”
Apple’s electronics business suffered. Mac and iPad sales dropped dramatically. China sales fell 2.9%, more than revenue.
“Apple still needs China on a near-term basis to drive sales and profits,” said Tom Forte of D.A. Davidson. “Long-term, emerging markets are important, especially India from a supply chain and sales standpoint.”
Tech firms expect a second-half rebound. For example, Wall Street expects Apple to rebound faster and exhibit a slight year-over-year revenue increase in its fiscal third quarter ending in June.
Investors await the company’s next significant hardware offering. Bloomberg claimed that Apple might debut a mixed-reality headgear next month at its annual software development conference. In addition, the corporation launched a high-yield savings account.
Refinitiv reported a 30% drop in Mac sales, above analyst expectations of 25%. According to Canalys, PC unit shipments decreased 33% in the first quarter, while Apple’s sales decreased modestly.
Apple’s wearables division, which includes AirPods and the Apple Watch, declined less than 1% compared to predictions of 4.4%.
Services, including iCloud and Apple Pay, rose 5.5% to $20.9 billion. Cook said Apple now has 975 million members, including Apple services and third-party apps, up from 935 million last quarter and 150 million from a year earlier.
Comment Template