Apple beats sales estimates with big bumps in iPhones, services


The iPhone maker is aiming to maintain
high demand for the iPhone and other hardware while growing
sales from services, including music and video subscriptions.

The iPhone maker is aiming to maintain
high demand for the iPhone and other hardware while growing
sales from services, including music and video subscriptions.

Apple Inc on
Thursday reported record fiscal second-quarter sales and profit
that beat Wall Street estimates as it managed chip shortages and
consumers snapped up new iPhones.

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Sales rose 19% in the Americas and were up by single-digits
in Europe and China.

Apple shares rose 2.3% in after-hours trading.

The Silicon Valley-based iPhone maker, which is the world’slargest company by market capitalisation, is aiming to maintain
high demand for the iPhone and other hardware while growing
sales from services, including music and video subscriptions.

The latest results show it is making ground on both goals,
as it beat sales expectations for every unit beside accessories.

Apple CFO Luca Maestri in a release
cited “continued strong demand for our products,” and a record
high for sales of services.

Apple’s overall fiscal second-quarter revenue was $97.3
billion, up 8.6% from last year and higher than analysts’
average estimate of $93.89 billion, according to Refinitiv data.

Apple had warned less favourable foreign exchange rates and
different timings of product launches from past quarters would
cut sales growth.

Quarterly worldwide phone sales revenue was $50.6 billion, a
5.5% increase from a year ago, and ahead of the average estimate
of $47.88 billion. Services, Apple’s second-biggest segment
after iPhones, increased sales 17% to $19.8 billion, just
beating the average estimate of $19.71 billion.

Profit was $25 billion, or $1.52 per share and easily topped
analysts’ expectations of $23.2 billion and $1.43 per share.

Apple also announced a 5% rise in its dividend to $0.23 per
share and board approval to buy back an additional $90 billion
in shares.

Investors have been bracing for drops in consumer spending
on tech gadgets and services as the war in Ukraine and other
factors drive up the cost of oil, food and other staples.

Some consumers also have put more money into travel and
entertainment outside their homes as COVID-19 outbreaks become
less deadly, eating into home technology budgets.

Maestri said in an interview that the war in Ukraine
affected revenue as Apple withdrew from Russia, but he declined
to specify an amount. He said the hit to sales would be greater
in the current quarter.

Asked about rising inflation, Maestri said demand,
particularly for iPhones, had been higher than the company had
anticipated at the start of the quarter. Inflation was affecting
expenses, he said.

Maestri noted that the app store, music, cloud and Apple
Care services each set all-time records for sales.

Remote work also has cut the need for pricey, high-end
phones and upgrades as people commute less.

But remote work has benefited other businesses.

Apple said iPad sales fell 2% to $7.65 billion due to
supply-chain constraints. They were still above analysts’
average estimate of $7.14 billion.

Revenue from Mac computers, also facing supply-chain issues,
rose 14.7% to $10.4 billion, compared with estimates of $9.25
billion.

Sales of wearables, home speakers and accessories rose 12%
to $8.8 billion, compared with estimates of $9.05 billion.

Maestri said Apple’s watch and AirPods sold well, and
attributed the miss to seasonal variability in demand for other
accessories.

But new lockdowns in China and Taiwan, where many parts andiPhones are produced, could bring new obstacles in terms of
supply and demand in the current quarter.

The services business is vulnerable to antitrust sanctions
in the United States, Netherlands, South Korea, South Africa and
many other countries that are weighing whether the company’s
fees are too high.

Apple said it now has 825 million paying subscribers across
its at least seven subscription offerings, up by 40 million from
785 million last quarter. Its growth comes as rivals such as
Netflix Inc report subscriber losses.

Labour unrest could newly affect Apple, too. More than 70% of
the over 100 eligible workers at an Apple store in Atlanta lastweek backed a filing for an election to become the company’s
first U.S. shop to unionise.



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