Apple beats Wall Street’s revenue and revenue targets, but iPhone sales fall short

Apple beats Wall Street’s revenue and revenue targets, but iPhone sales fall short

Apple Inc. beat Wall Street expectations on revenue and earnings when it reported its fourth-quarter financial results today, although it fell short in core product categories, including its iPhone business.

The company reported earnings before certain charges such as stock compensation of $1.29 per share, which just beat Wall Street’s forecast of $1.27 per share. Revenue for the period came in at $90.15 billion, up 8% from a year ago and ahead of the consensus estimate of $88.9 billion. Overall, Apple’s net income came in at $20.7 billion, up from $20.5 billion the year before.

“As we head into the holiday season with our most powerful lineup ever, we lead with our values ​​in every action we take and every decision we make,” Apple CEO Tim Cook (pictured) said in a statement. “We are deeply committed to protecting the environment, ensuring user privacy, enhancing accessibility, and creating products and services that can unleash humanity’s full creative potential.”

In an interview with CNBC, Cook pointed out that the company’s revenue would have grown by double digits if not for the strength of the US dollar. That said, he admitted that Apple had to make some tough decisions to deal with the current economic uncertainty, like most other tech companies. He revealed that the company has slowed the pace of hiring to cut costs, although it will still add new employees in key areas. “We hire deliberately,” he said.

Apple’s main iPhone business segment notably fell short of expectations, delivering $42.6 billion in revenue, up 9.6% from a year ago, but below estimates of $43.2 billion. That said, Apple’s fourth quarter is traditionally always slower because it comes ahead of the launch of its next-generation phones. In fiscal year 2022, the fourth quarter included only eight days of sales of the new iPhone 14 models.

See also  How to fix Snapchat support code C14A

Cook told analysts on a conference call that the company performed well considering that other smartphone makers are struggling with lower consumer demand. He said Apple was once again able to increase the number of “switchers,” or people switching to the iPhone from an Android device. He also said that the supply of the iPhone 14 Pro, which is the company’s highest-end phone, remains limited.

“We clearly bucked the industry trends on the phone if you look at third-party estimates of what the smartphone industry did,” Cook said.

Another failure was Apple’s services business, which also fell short of expectations. It posted revenue of $19.19 billion, missing estimates of $20.10 billion. Services grew by just under 5% – a noticeable decline from the previous quarter, when it grew by 12%.

That could be a concern for investors because the services business is far more profitable than Apple’s hardware and is capable of generating significant recurring revenue. For the full fiscal year, revenue from Apple’s services grew 14% to $78.1 billion, slower than the 16% growth in fiscal 2021 and much slower than the 27% growth in 2020.

Apple’s services business includes online services such as Apple TV+ and Apple Music, revenue generated from the App Store, hardware warranties and also search agreements with companies such as Google LLC. At the end of the quarter, Apple reported over 900 million total subscriptions, which includes subscribers to apps through the App Store.

The iPad business also struggled, with revenue falling nearly 10% from a year ago to $7.17 billion, below the analyst forecast of $7.94 billion. However, the company has just released some new iPad models, and it is hoped that they can boost sales in the current quarter.

See also  Eli Lilly Commits $92M+ to Purdue University to Establish Pharmaceutical Manufacturing Grant Program - Endpoints News

The picture looked brighter elsewhere for Apple. For example, sales of Mac computers bucked the trend in the broader PC industry, rising 25% to $11.51 billion, well above Wall Street’s estimate of $9.36 billion. Meanwhile, Apple’s Other Products segment, which covers products such as AirPods and the Apple Watch, saw revenue jump 9.8% to $9.65 billion, ahead of estimates of $9.17 billion.

Apple once again declined to provide any official guidance for the upcoming quarter, a practice it has stuck to ever since the COVID-19 pandemic emerged. However, CFO Luca Maestri provided some interesting data points. He said the company expects fiscal 2023 first-quarter revenue to grow less than the 8.1% growth in the most recent quarter. He also said the company believes its services business will be hurt by the macroeconomic environment, although it expects revenue to grow.

“We don’t provide revenue guidance, but we do share some directional insights,” Maestri explained.

Apple shares rose 1% in extended trading, after falling 3% earlier in the day.

Photo: Fortune Photo/Flickr

Show your support for our mission by joining the Cube Club and Cube Event Community of experts. Join the community that includes Amazon Web Services and CEO Andy Jassy, ​​Dell Technologies founder and CEO Michael Dell, Intel CEO Pat Gelsinger and many more corp and experts.

You may also like...

Leave a Reply

Your email address will not be published. Required fields are marked *