Apple Inc. on Thursday reported record sales in the holiday quarter, beating estimates due to strong iPhone demand and rising subscriber numbers, even as a shortage of chips that it says it, began to fade, cost him over $6 billion in revenue.
Apple shares rose more than 5% in after-hours trading. But they are down 10% this year, in line with the broader market, as investors reconsider stocks that have soared during the pandemic and shift funds to safer assets.
The record results for the quarter ended Dec. 25 reflect what analysts have described as Apple taking advantage of its incredible size. The company, which has more than 1.8 billion active devices on the market, has been able to force suppliers and manufacturers to produce large quantities of iPhones and other devices despite pandemic-induced shortages. and more recently the Omicron variant.
“They’ve navigated the supply chain better than everyone else, and it shows in the results,” said Ryan Reith, who researches the smartphone market for industry tracker International Data Corporation.
Investors wonder how long it will take for Apple to deliver its next big thing, like an augmented reality (AR) headset for the Metaverse.
“We see a lot of potential in this space and are investing accordingly,” CEO Tim Cook told investors.
Chief Financial Officer Luca Maestri said revenue growth will slow in the current quarter compared to the December quarter, mainly due to less favorable exchange rates and different product launch dates.
Maestri told Reuters in an interview that supply constraints would ease in the current quarter, ending in March.
“The level of constraint will very much depend on other companies, demand for chips from other companies and other industries. It’s hard for us to predict, so we’re trying to focus on the short term,” he said. -he declares.
With few rival phones debuting during the holiday shopping season, the iPhone 13, which began shipping days before the start of the quarter, generated $71.6 billion in global revenue for Apple. dollars, a 9% increase from the 2020 holiday season which easily beat Wall Street. goals, according to Refinitiv data.
Apple’s smartphone market share in China hit a record 23% during the holiday quarter, when it was the top-selling vendor for the first time in six years, the firm reported on Wednesday. Counterpoint Research studies.
The company’s overall first-quarter revenue was $123.9 billion, up 11% from a year ago and above analysts’ average estimate of $118.7 billion. dollars. Earnings were $34.6 billion, or $2.10 per share, versus analysts’ expectations of $31 billion and $1.89 per share.
The pandemic has accelerated the adoption of digital tools for communication, learning and entertainment, allowing Apple to skyrocket sales in each of the company’s segments, including computers, accessories and tablets.
Apple’s Services business, which covers paid apps such as Apple TV+, Apple Music and Apple Fitness, also saw a big bump. Services revenue rose 24% to $19.5 billion, beating analysts’ estimates of $18.6 billion. The company has 785 million paying subscribers across all of its offerings, up from 620 million a year ago and 745 million last quarter.
iPad sales fell 14% to $7.25 billion from analyst estimates of $8.2 billion, appearing to confirm industry predictions that iPads would be a low priority for parts rare.
Mac sales rose 25% to $10.9 billion from estimates of $9.5 billion, and accessories sales rose 13% to $14.7 billion from estimates of 14 .6 billion.
For investors, the growing services business is helping to ease production problems. Apple is trading at 27 times expected earnings over the next 12 months. Although down from 35 a year ago, it remains above the company’s five-year average of 20 times expected earnings, according to Refinitiv.
Apple is facing antitrust pressures in the United States and Europe that could lead to new regulations that would reduce its service revenue.
Late last month, the Dutch Authority for Consumers and Markets (ACM) ordered Apple to make changes to apps offered in the Apple App Store in the Netherlands by January 15 or to face fines, after finding that the American company had abused its dominant position in the market. by requiring dating app developers to use Apple’s in-app payment system exclusively.
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