Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Apple smashes earnings estimates with record sales

Apple smashes earnings estimates with record sales

The company’s overall fiscal first-quarter revenue was $123.9bn, higher than analysts’ average estimate of $118.7bn.

Apple Inc on Thursday reported record sales in the holiday quarter, beating estimates as it benefited from high iPhone demand in China and withstanding supply chain constraints and Omicron variant disruptions.

Chief Executive Tim Cook had warned in October that chip shortages were affecting the manufacturing of most Apple products and could lead to over $6bn in lost sales.

Chief Financial Officer Luca Maestri told Reuters news agency in an interview that the effect had indeed been more than $6bn, but that constraints would decrease in the current quarter, ending in March.

“The level of constraint will depend a lot on other companies, what will be the demand for chips from other companies and other industries. It’s difficult for us to predict, so we try to focus on the short term,” he said.

With few rival phones debuting in the holiday shopping season, the iPhone 13, which started shipping days before the quarter began, led to worldwide phone sales revenue for Apple of $71.6bn, a 9 percent increase from the 2020 holiday season that handily beat Wall Street targets, according to Refinitiv data.

Apple’s smartphone market share in China reached a record 23 percent in the holiday quarter, when it was the top-selling vendor there for the first time in six years, research firm Counterpoint Research reported on Wednesday.

The company’s overall fiscal first-quarter revenue was $123.9bn, 11 percent up from last year and higher than analysts’ average estimate of $118.7bn. Profit was $34.6bn, or $2.10 per share, compared with analysts’ expectations of $31bn and $1.89 per share.

The coronavirus pandemic has accelerated the adoption of digital tools for communication, learning and entertainment, powering Apple to blowout sales across 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 has seen a big bump. Services revenue rose 24 percent to $19.5bn, topping analysts’ estimates of $18.6bn. The company has 785 million paying subscribers across its offerings, an increase from 620 million a year ago and 745 million last quarter.

Sales for iPads fell 14 percent to $7.25bn compared with analyst estimates of $8.2bn, seeming to confirm industry predictions that iPads would have low priority for any scarce parts.

Sales for Macs rose 25 percent to $10.9bn compared with estimates of $9.5bn, and sales for accessories rose 13 percent to $14.7bn compared with estimates of $14.6bn.

For investors, the growing services business is helping mitigate production challenges. Apple is trading at 27 times expected earnings over the next 12 months. While down from as much as 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 pressure in the United States and Europe that could lead to new regulations that cut into its services revenue.

Late last month, the Dutch Authority for Consumers and Markets (ACM) ordered Apple to make changes for apps on offer in the Apple App Store in the Netherlands by January 15 or face fines, after it found that the US company had abused its market dominance by requiring dating app developers to exclusively use Apple’s in-app payment system.

Supply chain issues are dragging on and concerns remain about how long it will take Apple to deliver its next big product, such as an augmented reality headset or an electric vehicle.

Apple had reported strong customer response to its latest release, the AirTag, when the accessory began shipping in the fiscal third quarter of 2021.

Apple posted a rare revenue miss in the fiscal quarter ended September 25, which CEO Cook attributed to pandemic-related supply constraints and manufacturing disruptions that together cost the company an estimated $6bn in sales.

But smaller rivals are struggling to keep up with production, leading to Apple market share gains in regions such as China, said Angelo Zino of CFRA Research in a research note.

“Since Apple has many customised components going into the iPhones, Macs, Apple Watch and others and the scale (volume and price) at which it procures, Apple has been able to lock in suppliers’ capacities to timely produce those parts with lesser delays,” said Neil Shah of Counterpoint Research.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
The Personality Rights Challenge in India’s AI Era
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Study Finds No Safe Level of Alcohol for Dementia Risk
Trump Says Ukraine Can Fully Restore Borders with NATO Backing
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Germany Weighs Excluding France from Key European Fighter Jet Programme
Cyberattack Disrupts Check-in and Boarding Systems at Major European Airports
Björn Borg Breaks Silence: Memoir Reveals Addiction, Shame and Cancer Battle
When Extremism Hijacks Idealism: How the Baader-Meinhof Gang Emerged and Fell
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
Trump Orders $100,000 Fee on H-1B Visas and Launches ‘Gold Card’ Immigration Pathway
France’s Looming Budget Crisis and Political Fracture Raise Fears of Becoming Europe’s “Sick Man”
Three Russian MiG-31 Jets Breach Estonian Airspace in ‘Unprecedentedly Brazen’ NATO Incident
European manufacturers against ban on polluting cars: "The industry may collapse"
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
U.S. and China Agree on Framework to Shift TikTok to American Ownership
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
The New Life of Novak Djokovic
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
Poland Shoots Down Russian Drones in Airspace Violation During Ukraine Attack
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Macron Appoints Sébastien Lecornu as Prime Minister Amid Budget Crisis and Political Turmoil
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
France, at an Impasse, Heads Toward Another Government Collapse
×