Apple beats earnings expectations thanks to iPhone sales

5 May 2023

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Other products, such as iPad and Mac, had an underwhelming performance as overall revenue fell for a second consecutive quarter.

Apple has exceeded Wall Street expectations with its latest earnings report as the iPhone maker’s flagship product saw record sales in the second quarter of the year.

While quarterly revenue of $94.83bn was down 3pc over the same period last year, quarterly earnings per share of $1.52 remained unchanged. Both figures were higher than Refinitiv expectations, leading to Apple’s shares rising around 2pc in extended trading.

This is the second consecutive quarter in which Apple’s overall sales fell. In the tech giant’s first earnings report of this year, it reported total net sales of $117.15bn, which was lower than the same period last year.

Apple CEO Tim Cook blames this on the general economic situation globally.

“We are pleased to report an all-time record in services and a March quarter record for iPhone despite the challenging macroeconomic environment, and to have our installed base of active devices reach an all-time high,” Cook said of the latest earnings.

“We continue to invest for the long term and lead with our values, including making major progress toward building carbon neutral products and supply chains by 2030.”

Revenue from iPhone sales was higher than expected at $51.33bn while Mac and iPad revenues disappointed. Apple warned last year that these two segments would not fare as well because of ongoing parts shortages.

Mac sales have been particularly badly hit, falling 31pc over last year’s figure to $7.17bn.

“There are really two reasons for that,” Cook told CNBC. “One is the macro situation in general. And the other is where we’re still comparing to the very difficult compare of the M1 MacBook Pro 14 and 16-inch from the year-ago quarter.”

Services, however, is at an all-time sales high for the second quarter in a row, thanks to an increase in uptake of Apple’s monthly subscriptions, App Store revenue and other related revenues. Total sales from services stood at $20.9bn, a 5.5pc increase over last year.

Luca Maestri, Apple’s chief financial officer, said that the company generated strong cash flow over the latest quarter and returned more than $23bn to shareholders.

“Given our confidence in Apple’s future and the value we see in our stock, our board has authorised an additional $90bn for share repurchases. We are also raising our quarterly dividend for the eleventh year in a row,” Maestri said.

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Vish Gain is a journalist with Silicon Republic