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New York: Apple revenue grew nearly 9 per cent on an annual basis in the quarter ending March, with the company bucking investor worries that a deteriorating macroeconomic environment will hurt demand for high-end smartphones and computers.

Stocks fell nearly 4 per cent in extended trading after initially rising.

Apple Chief Financial Officer, Luca Maestri warned of several challenges in the current quarter, including supply constraints related to Covid-19, that could hurt sales between $4 and $8 billion.

Apple also warned that demand in China was being hurt by Covid-related lockdowns.

Apple CEO Tim Cook said the company was “not immune” to supply chain challenges.

Compared to Refinitiv consensus estimates, EPS was $1.52 vs $1.43 estimated. Revenue was $97.28 billion vs $93.89 billion estimated, up 8.59 per cent year-over-year.

iPhone revenue was $50.57 billion vs $47.88 billion estimated, up 5.5 per cent year-over-year. Services revenue was $19.82 billion vs $19.72 billion estimated, up 17.28 per cent year-over-year. Other Products revenue was $8.81 billion vs $9.05 billion estimated, up 12.37 per cent year-over-year.

Mac revenue was $10.44 billion vs $9.25 billion estimated, up 14.73 per cent year-over-year. iPad revenue was $7.65 billion vs $7.14 billion estimated, down 1.92 per cent year-over-year. Gross margin was 43.7 per cent vs 43.1 per cent estimated.

Apple hasn’t provided official revenue guidance since February 2020, citing uncertainty from the Covid-19 pandemic.

The board authorised $90 billion in share buybacks, maintaining its pace as the public company that spends the most buying its own shares.

Apple spent $88.3 billion on buybacks in 2021, according to S&P Dow Jones Indices.

Cook said the iPhone business had a successful quarter with “switchers,” or people who previously had an Android phone but decided to buy an iPhone.

“We had a record level of upgraders during the quarter and we grew switchers, strong double digits,” he told CNBC.

Apple’s premium smartphone business may be insulated from concerns about deteriorating consumer confidence. Sales also came despite a difficult year-over-year iPhone comparison since the new iPhones were launched earlier in 2021.

“It’s clearly a strong cycle,” the Apple CEO added.

Mac computers continued to grow after Apple transitioned its lineup to use its own M1 chips instead of Intel processors.

Cook said the iPad business had “very significant supply constraints” during the quarter.

“The (Services) comps are a bit strange during Covid, because we’ve had lockdowns and then reopenings and so on,” CFO Maestri said.

The Apple CEO added that financial performance was “better than we anticipated”.

The fastest growing region for Apple was the Americas, which saw sales rise 20 per cent during the quarter to $50.57 billion.

Greater China, which includes Hong Kong and Taiwan, grew at a slower 3.47 per cent rate to $18.34 billion.

The US economy shrank at an annual rate of 1.4 per cent in the first quarter as effects of the Omicron surge started to show up, the US Commerce Department reported.

The latest data marks the economy’s first contraction since the Covid-19 pandemic impacted the country in early 2020, Xinhua news agency reported.



Author: Howard Caldwell