Despite supply issues and the pandemic’s lingering impacts, Apple reported its best-ever single quarter in terms of revenue, with sales climbing over 11%. Except for iPads, Apple outperformed analyst expectations in every product category. Tim Cook, Apple’s CEO, stated that the company’s supply problems were improving.
Apple CEO Tim Cook indicated on Thursday that the company’s supply chain issues were improving, driving the stock up 5% in extended trade and providing earnings beat.
Except for iPads, Apple exceeded analyst expectations in every product category, and overall revenue increased by 11% year over year.
Here’s how Apple fared against Refinitiv consensus estimates for the quarter ended Dec. 25:
- EPS
$2.10 vs. $1.89 expected, a 25% increase year over year
- Revenue
$123.9 billion, up 11% from the previous year’s projection of $118.66 billion
- Revenue from the iPhone
$71.63 billion, up 9% above last year’s projection of $68.34 billion
- Revenue from services
$19.52 billion vs. an estimate of $18.61 billion, a 24 percent increase in year-over-year
- Revenue from Other Products
$14.70 billion, up 13% from the previous year’s estimate of $14.59 billion
- Revenue from the Mac
$10.85 billion, up 25% from the previous year’s prediction of $9.52 billion
- Revenue from iPads
$7.25 billion vs. a forecast of $8.18 billion, a 14 percent decrease year over year
- Gross profit margin
43.8 percent vs. expected 41.7 percent
Apple did not provide any official information on expectations in the current quarter. Apple hasn’t given any updates on the Covid-19 epidemic since it began, citing uncertainty.
In an interview, Apple CEO Tim Cook did disclose a forward-looking data point.
“We expect solid year-over-year sales increase in the March quarter,” Cook added. “We also expect supply restrictions to be smaller in the March quarter than in the December quarter.”
Apple delivered again another solid performance in its most crucial quarter of the year, which includes holiday sales. Despite management concerns in October that supply issues could impact the company’s sales, every one of Apple’s product lines grew year over year, except for iPad sales.
Cook stated that the company’s supply concerns were becoming less of an issue. He has said that the December quarter was worse than Apple’s September quarter in supply issues. But expects the March quarter to improve.
“Our biggest concern is chip supply,” Cook explained. “It’s chip supply on legacy nodes.” “And we’re doing very well with the cutting-edge stuff.”
Leading-edge chips are the phone’s strong processors, while “legacy node” chips are the less sophisticated portions that handle things like driving screens and controlling electricity.
Apple introduced new iPhone models in September, and the first full quarter of iPhone 13 sales provided investors with an indication of how competitive the smartphones are in the market. Sales increased by 9% year over year to $71.63 billion, however at a slower rate than Apple’s overall company.
Apple CEO Tim Cook boasted about the 9 percent increase in iPhone sales. “This is despite supply challenges throughout the quarter,” Cook explained.
Services such as iCloud, Apple Music, search licensing, and App Store fees continued to increase rapidly, with revenue growing by 25% yearly to $19.52 billion. Apple’s most successful business area is services, and its growth contributed to the company’s higher-than-expected gross margin.
Apple’s other products category, which includes the Apple Watch and AirPods, increased by 13% year over year. Sales of Apple’s current Series 7 watch, which has a bigger screen, as well as new AirPods, were up this quarter.
Macs grew at the fastest rate of any Apple hardware line, increasing 25% year over year to $10.85 billion. Apple released new MacBook Pro models starting at $1,999 in October, which were well-received and contained an Apple chip rather than an Intel chip.
The most noteworthy failure was the iPad. Sales fell short of analyst expectations this year, owing to Apple’s inability to produce enough iPads and its decision to focus on other devices. Cook blamed the iPad’s poor performance on “severe” supply restrictions.
Apple, according to Cook, is experiencing inflationary pressure.
Cook stated, “I believe everyone is seeing inflationary pressure.” “There’s no getting around that.”
Apple CEO Tim Cook indicated on Thursday that the company’s supply chain issues were improving, driving the stock up more than 3% in extended trade and providing a strong earnings beat. Except for iPads, Apple exceeded analyst expectations in every product category, and overall revenue increased by 11% year over year.
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