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Apple weathers tech industry storm to top profit and revenue targets

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Apple weathers tech industry storm to top profit and revenue targets

Apple’s quarterly earnings on Thursday revealed that the company is weathering the ongoing tech downturn better than its competitors, reporting revenue and profit that topped Wall Street targets.

Revenue rose 8% this quarter to $90.1bn, above estimates of $88.9bn, while net profit was $1.29 a share, topping with the average analyst estimate of $1.27 a share, according to data from the market research firm Refinitiv.

Apple’s results showed some resilience in the face of a weak economy and strong US dollar that has led to disastrous reports from many tech companies. Its quarter was saved by its oldest technology – desktop computers.

The company reported sales of iPads were $7.2bn, compared with the average estimate of $7.94bn.

Phone sales for the company’s fiscal fourth quarter rose to $42.6bn, when Wall Street expected sales of $43.21bn, according to Refinitiv. By contrast, the overall global smartphone market dropped 9% for the just-ended quarter, its third consecutive decline of the year, according to Canalys data.

The results come after massive misses from other tech firms, including Meta which lost $80bn in value overnight after reporting disappointing quarterly results on Wednesday. Minutes before Apple reported, Amazon added to the tech sector’s misery, predicting a holiday profit slump that sent its shares down 20%.

Apple’s saving grace were Mac sales of $11.5bn, far ahead of analyst estimates of $9.36bn. The company’s chief financial officer, Luca Maestri, said iPhone sales set a record for the September quarter, exceeding the company’s forecast.

“We did better than we anticipated, in spite of the fact that foreign exchange was a significant negative for us,” Maestri said.

Sales of Apple’s Mac computers received a boost from this summer’s introduction of redesigned MacBook Air and MacBook Pro laptops. New tablets went on sale this week.

Apple wearables such as AirPods and other accessories notched sales of $9.7bn, slightly ahead of the Wall Street forecast of $9.2bn.

“Similar to iPhones, we expect the macro impacts to units to creep into the higher end at some point,” wrote Barclays hardware analyst Tim Long ahead of the results.

In a call with investors on Thursday, chief executive Tim Cook said chip shortages were no longer a factor this quarter, an issue the company has struggled with in the past.

He said that the company is “supply constrained” regarding the Apple Watch and attempting to satisfy customer demand, adding that two thirds of customers purchasing an Apple watch during the quarter were new to the product.

Growth in the company’s services business, which has buoyed sales and profits in recent years, saw a rise to $19.2bn in revenue, below the estimate of $20.10bn.

Like many tech companies, Apple has slowed hiring in the last year, an issue Cook said has been impacted by inflation.

“There’s clearly wage inflation, and we’re focused on taking care of our teams and offering them the best benefits and best compensation so we can empower them to do the best work of their lives,” he said.

Apple declined to offer forward-looking revenue guidance, citing “continued uncertainty around the world”, but said the company anticipates year over year revenue performance will decelerate.

“We are still living through unprecedented times,” Cook said. “The world continues to be unpredictable.”

Reuters contributed to this report

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