reported earnings data in the September quarter, continuing the pandemic that was closely watched by investors as the demand for more consumer goods weakened.
The Cupertino, Calif.-based company announced its full earnings Thursday after the market closed. Up to now, Apple’s business has remained strong in the face of many mobile phone sales and global economic challenges.
“This is better than what we expected at the beginning of the quarter,” said Apple’s Chief Financial Officer Luca Maestri in an interview. Currency fluctuations have had a negative impact on the company, he said. The value of the dollar has increased compared to other currencies this year, a development that has weighed on the results of various companies.
For the quarter that ended in September, sales from the iPhone were $42.6 billion, an increase of 9.7% from last year. Analysts expected iPhone sales to be $43 billion, according to FactSet. The iPhone continues to account for about half of the company’s revenue.
Apple’s total revenue rose 8% from last year to $90.1 billion, a record for the July-September period that exceeded analysts’ estimates. Revenue for the quarter was $20.7 billion, also a record.
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CEO Tim Cook said in July that the company did not see evidence in its data that macroeconomic headwinds had an impact on its iPhone sales.
Apple’s engineers are seeing a significant slowdown. Earlier this week, Microsoft Corp.
Google and Facebook are the main Meta Platforms Inc.
both reported disappointing earnings, citing things like softening consumer demand for PCs or weaknesses in digital advertising.
Last month, Apple announced its new line of smartphones with the iPhone 14, which includes two more expensive models as well as two special models of the phone and the Pro name . Analysts expected the basic models to be weak as consumers focused on the Pro models, which are equipped with a better camera and chips.
The latest iPhone Pro models account for 60% of total iPhone 14 sales, according to JP Morgan analyst Samik Chatterjee. At first, it was split equally between the basic and Pro models in the iPhone 12 and 13 generations, he said.
Said Mr. Maestri, due to the strong demand for its iPhone 14 Pro models, has limited supply. “We are working hard to meet the high demand we are seeing,” he said. Said Mr. Maestri, the company is also facing installation problems for the Apple Watch Ultra due to high demand.
The Pro’s strong sales were expected to offset the weakness in overall iPhone sales by increasing Apple’s selling price for the iPhone. Since the launch of a Pro model in the 2019 iPhone 11 generation, iPhone buyers have gradually been positioned at the top with Apple. With the arrival of 5G in late 2020, US consumers are willing to pay the price.
The average selling price of the iPhone rose to $954 in the company’s June quarter, from $783 in the September 2019 quarter, according to Consumer Intelligence Research Partners.
Apple’s revenue from its services business was $19.2 billion, up 5% from last year. In the last quarter, revenue growth slowed to 12% compared to three months a year earlier.
Said Mr. Maestri, the decrease in services is caused by the effects of foreign trade as well as the slowdown in digital advertising and games.
Investors are increasingly worried about a slowdown in its services business as a key part of Apple’s business expansion as the iPhone matures. Some analysts think that the business of Apple is a quick description of the needs of customers before the exposure to the iPhone sales.
Earlier this week, Apple raised the price of its Apple Music and Apple TV + streaming services, which could provide an increase in the service’s revenue for the current quarter.
Sales from Great China in the September quarter were $15.5 billion, up 6% from last year, compared to the $15.1 billion analysts had expected. Analysts were worried about the strength of Apple’s business in China, as the country continues to implement several lockdown measures related to Covid.
Write to Aaron Tilley at [email protected]
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