At the end of a dismal week for Big Tech earnings, Apple Inc. managed to beat revenue and earnings expectations with the help of Mac sales at a record pace during the back-to-school season, overcoming a small loss. in iPhone sales. .
Shares bounced between slight gains and losses in the after-hours stock on Thursday, even as executives projected revenue growth could slow in the holiday quarter. As has been the case during the COVID-19 pandemic, Apple executives declined to offer a traditional financial forecast, but Chief Financial Officer Luca Maestri told investors on a conference call that they expect a sequential slowdown in growth during the December quarter, driven in part by strong currency impacts, difficult comparisons for the Mac business and pressures on the services business.
The smartphone giant’s revenue grew 8% in its fiscal fourth quarter, to $90.1 billion from $83.4 billion a year earlier, and topped the FactSet consensus of $88.7 billion. Apple generated $42.6 billion in its biggest business, iPhone sales, up from $38.9 billion a year earlier, but analysts were forecasting $43 billion.
A big driver of the rise came from Apple’s AAPL,
Mac segment, which posted a brisk pace even as iPhone sales slowed. The Mac business set an all-time quarterly revenue record at $11.5 billion in the back-to-school quarter, up from $9.2 billion a year earlier and easily above the FactSet consensus. , which asked for $9.3 billion.
Chief Executive Tim Cook explained on the call that the Mac category benefited from the launch of the MacBook Air with Apple’s custom M2 chip, as well as easing supply constraints that allowed Apple to meet earlier pent-up demand. However, Maestri said he expects Mac revenue to “decrease substantially” year over year in the December quarter, as that period faces difficult comparisons.
A key question in the Apple report was how demand for the company’s new iPhone 14 lineup has held upespecially given reports that the company has lowered previous production targets. Cook shared that while he was still early, “consumer demand was strong and better than we anticipated it would be.”
The company has limited supply on the iPhone 14 Pro and iPhone 14 Pro Max models, Cook said, adding that it’s difficult for the company to “determine the precise mix” of its phones until it can meet all of their demand.
Revenue performance across Apple’s product lines was mixed. While Mac sales were strong, iPad revenue fell to $7.2 billion from $8.3 billion, while analysts were modeling $7.8 billion in iPad revenue. That category saw “opposite” trends in relation to the Mac business in which iPads faced an “exceptionally strong iPad quarter” from the previous year that included a product launch.
The company brought in $9.7 billion in revenue in its accessories, home and accessories category, up from $8.8 billion in the same period a year ago. Analysts had expected revenue of $9.2 billion.
Services revenue rose to $19.2 billion from $18.3 billion, but fell short of the FactSet consensus of $20.0 billion. Maestri shared that while he expects the segment to grow in the December quarter, the business could be affected by advertising and gaming pressures, as well as foreign exchange effects.
For the latest quarter, Apple posted net income of $20.7 billion, or $1.29 per share, compared to $20.6 billion, or $1.24 per share, in the same period a year earlier. Analysts tracked by FactSet had expected $1.27 per share in earnings.
If Apple shares managed to hold gains through Friday’s close, it would likely be the only Big Tech company to see positive stock performance after earnings this week. Microsoft Corp. MSFT shares,
Alphabet Inc. GOOG,
and Meta Platforms Inc. META,
each posted sharp falls in the session after their respective reports, and Amazon.com Inc. AMZN,
shares fell 12% in late trading on Thursday.
Apple shares have lost 18% so far this year, according to the Dow Jones Industrial Average DJIA,
– which counts Apple as one of its 30 components – is down 12%.