Home Business Despite inflation, Apple's profits rise, spending cuts hit tech

Despite inflation, Apple’s profits rise, spending cuts hit tech

Apple shares initially plunged in after-hours trading but were back in positive territory.

Apple Inc. reported revenue and profit on Thursday that topped Wall Street targets, one of the few bright spots in a tech sector that is suffering cuts due to inflation.

The forecast for the holiday quarter was more grim. While not providing specific numbers, Apple said revenue growth would fall below 8% in the December quarter, but didn’t go as far as Amazon.com, whose dire holiday outlook sent its shares down 14%.

Apple shares initially plunged in after-hours trading but were back in positive territory.

The Cupertino, California-based tech giant was saved by its oldest technology, its laptop computers, while its star, the iPhone, faltered.

Although iPhone sales weren’t as strong as some analysts had targeted, they were still a record for the September quarter. Mac sales of $11.5 billion were well ahead of analyst estimates of $9.36 billion.

Apple’s results showed some resilience in the face of a weaker economy and a stronger US dollar, which has led to disastrous reports from many tech companies. Like Facebook’s parent Meta and Snap, Apple is also seeing a slowdown in ad spend. Overall, Apple said quarterly revenue rose 8% to $90.1 billion, above estimates of $88.9 billion, and net profit was $1.29 per share, which beat the average analyst estimate of $1.27 per share, according to Refinitiv data. The stock was on top.

“We performed better than expected, despite the fact that foreign exchange was a significant downside for us,” Chief Financial Officer Luca Maestri said.

The rising US dollar has affected many companies like Apple that generate substantial foreign revenue and are getting less cash back when they convert it. For consumers, this raises the price of new equipment when purchased in countries outside the United States.

Apple’s iPhone sales rose to $42.6 billion for the company’s fourth quarter, according to Refinitiv IBES, when Wall Street was expecting sales of $43.21 billion.

Maestri said iPhone sales hit a record for the September quarter, a 10% improvement over the previous year’s quarter and exceeding the company’s forecast.

“The iPhone numbers are a sign of market turmoil and uncertainty, but Apple has different ways of offsetting that,” said Runner Bjorhovde, research analyst at market research firm Canalys.

Sales of Apple’s Mac computers got a boost this summer with the introduction of the redesigned MacBook Air and MacBook Pro laptops. The new tablet went on sale this week.

Apple said its gross margin of 43.3% was a record for the September quarter.

Maestri said strong computer sales also reflected a backlog of orders, caused by a prolonged shutdown at one of the factories that produced the Mac, which Apple was able to fill in the quarter.

The company reported that iPad sales were $7.2 billion, compared to an average estimate of $7.94 billion.

Apple wearables like AirPods and other accessories posted sales of $9.7 billion, slightly ahead of Wall Street’s forecast of $9.2 billion.

“They said they didn’t have any specific issues with the supply, so it seems to be a thing of the past,” said Carolina Milanesi, consumer analyst at Creative Strategies.

Growth in the company’s services business, which has boosted sales and profits in recent years, saw revenue rise to $19.2 billion, down from estimates of $20.10 billion.

Maestri said Apple experienced a slowdown in digital advertising and gaming, as have others in the sector.

Jesse Cohen, Senior Analyst at Investing.com, said, “Like other major tech companies, even Apple is suffering from the negative impact of a deteriorating macro backdrop and ongoing supply chain problems, although it has made it difficult to navigate the challenging environment.” Did a better job.” ,

In China, which has experienced a sharp economic downturn, Apple reported sales of $15.5 billion in the fourth quarter. That’s a profit from last quarter, when Apple reported sales of $14.6 billion.

Apple said it now has 900 million paying customers for its services, up from 860 million last quarter.

(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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