Apple yesterday said parts shortages are easing and that demand for iPhones is unceasing despite consumers tightening other spending, helping it top Wall Street expectations and forecast faster sales growth ahead.
The Silicon Valley giant’s shares rose 3% following the release of the results.
Though macroeconomic indicators around the world are turning negative, Chief Financial Officer Luca Maestri told Reuters there had been no slowdown in demand for iPhones. The iPhone maker’s loyal and relatively affluent customer base has enabled it to weather dips better than other consumer brands in the past, and the results for Apple’s fiscal third quarter suggest a similar pattern emerging.
Canalys Research analyst Runar Bjorhovde said, “Apple in that sense has a certain robustness that will allow it to be impacted less than a lot of its competitors.”
The slumping economy is hurting sales of advertising, accessories and home products, though, Apple’s Maestri said in an interview.
“Fortunately, we have a very broad portfolio, so we know we’re going to be able to navigate that,” he added.
Parts shortages will continue to limit Mac and iPad sales, Maestri said, though the impact has been easing. They cost Apple under $4 billion in sales in the quarter ended June 25, less than it had forecast. Maestri said the company expects the hit to diminish further in the current quarter.
Sales compared to a year ago should rise faster in the current quarter than 2% growth it posted in the just-ended quarter, Maestri said.
Overall, Apple said quarterly sales and profit were $83.0bn and $1.20 per share, above estimates of $82.8bn and $1.16 per share, according to Refinitiv data.
While sales of iPhones and iPads topped expectations, revenue from services, Mac computers and accessories missed Wall Street targets and sales in the crucial China market fell 1%.
The rising US dollar has hit many companies such as Apple that generate substantial foreign revenue and are getting less cash back when they convert it. Apple said currency fluctuations would cut sales by 6% this quarter.
The most recent economic woes include supply chain disruptions that have hit production of some Apple products such as iPads and Macs whose assembly locations were clustered near regions of China that went into Covid lockdowns.
Apple, like many of its tech industry peers, is reportedly slowing hiring and cutting costs given the tough economic climate. Apple shares closed yesterday down about 11% so far this year.
Meanwhile, Amazon.com yesterday said it expects a jump in third-quarter revenue, as the retailer collects bigger fees from Prime loyalty subscriptions and as a fuel surcharge on merchants helps it manage high delivery costs.
Shares of the world’s largest online retailer rose 13% in trading after the bell.
Amazon, like much of the retailer industry, is facing a reckoning as US consumer confidence has tumbled to a recent low, and some are sticking to lower-priced essentials to manage inflation.
Reuters
