iPhone sales rose 1.5 percent as Apple’s quarterly revenue beat expectations after making hits in India
Apple’s results beat expectations on Thursday, showing the tech giant’s resilience in a slowing global economy thanks to better-than-expected iPhone sales and notable achievements in India and other recent markets.
Shares of the largest US company by market value rose 2 percent after Apple Inc. beat Wall Street expectations for revenue and profits for the first quarter of April. The company’s results contrast with disappointing numbers from major chipmakers due to a slower-than-expected recovery in economic growth in China.
Apple executives said on Thursday that gross margins for the current quarter will be better than expected despite an expected decline in revenue as supply chain issues improve.
Apple said its sales for the second quarter of the fiscal year ending April 1 fell 2.5% to $94.8 billion (about Rs. 7,74,400 crores), ahead of expectations for a 4.4% decline, according to Refinitiv data. Earnings were flat at $1.52 (roughly Rs. 120) per share, compared to 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 fell 13 percent during the first three months of 2023, according to research firm Canalys, which said Apple gained market share against its Android rivals.
Apple’s gross profit margin will be between 44 percent and 44.5 percent, CFO Luca Maestri said, higher than the estimate of 43.7 percent, according to Refinitiv data. But he also said that Apple’s revenue will likely decline slightly. Analysts had expected an increase of 2.1% to $84.7 billion (approx Rs. 6,92,000 crores) for the fiscal third quarter ending in June.
Apple shares have outperformed most of Wall Street in 2023, up 28 percent since the start of the year. Investors view the company as a defensive play during a period of economic uncertainty.
Apple raised its dividend to 24 cents per share, from 23 cents per share a year ago. The Board of Directors has authorized a $90 billion (roughly Rs. 7,35,200 crores) share buyback programme, same as last year.
Emerging markets are outperforming
Apple CEO Tim Cook told Reuters in an interview Thursday that the company set a fiscal second-quarter record for iPhone sales, thanks in part to a pick-up of new users in markets such as India, where Cook recently traveled to open the first store in that country. Apple stores.
“We’ve been pleased with our performance in emerging markets,” Cook said. “We set records for the iPhone installed base in every geographic segment, and had very strong (new) sales in emerging markets, particularly in Brazil, India and Mexico.”
Cook also said that the crises in the supply chain have disappeared. “We had no material shortages whatsoever during the quarter in any of the products.”
Not all of Apple’s business lines were immune from the decline in electronics. Mac sales fell sharply while iPad revenue fell. Sales in China also fell 2.9%, a drop slightly larger than total revenue.
“Apple still needs China in the near term to increase sales and profits,” said Tom Forte of DA Davidson. “Long-term emerging markets are important, especially India from a supply chain and sales perspective.”
Other tech companies have expected a recovery in the second half. Wall Street expects Apple to recover faster and show modest year-over-year revenue growth during the third fiscal quarter ending in June.
Investors are still waiting for the company’s next major hardware product. Bloomberg reports that the iPhone maker may unveil a mixed-reality headset as soon as next month, when it holds its annual software developer conference. The company recently announced a new service business such as a high-yield savings account.
Mac sales have fallen more than 30 percent, compared to analyst estimates of a 25 percent drop, according to Refinitiv. Apple’s sales only slightly outperformed 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 like the AirPods and Apple Watch, fell less than 1 percent compared to estimates for a decline of 4.4 percent.
Apple’s largest business was the Services segment, which includes products like iCloud and Apple Pay, which grew 5.5 percent to $20.9 billion (roughly Rs. 1,70,700 crores). Cook said Apple now has 975 million subscribers on its platform, which includes Apple services and third-party apps, up from 935 million last quarter and an increase of 150 million from last year.
© Thomson Reuters 2023
(This story has not been edited by the NDTV staff and is automatically generated from a syndicated feed.)