Apple reported that third quarter results narrowly exceeded estimates for Wall Street, allaying fears that supply chain issues and an unstable economy will devastate sales of the tech giant.
The bone apple revenue were standing 2% to $83 billion in the period ending June 25, versus an average analyst forecast of $82.8 billion.
Earnings rose to $1.20 per share, beating the projection of $1.16. The company provided no guidance for the fourth quarter, continuing the approach it took at the start of the pandemic.
to sales of Apple iPhone and iPad held up better than expected during the quarter, although other products, including Macs and portable devices, did not reach forecasts. Services, a key growth area for Apple, narrowly missed estimates.
Still, iPhone numbers suggest Apple is experiencing a slowdown in the spending on smartphones. The company has also shown it can circumvent supply chain constraints due in part to COVID-19 Closures in China.
In April, Apple warned that problems would erase between 4 billion and 8 billion dollars of third quarter revenue. In this context, the latest figures are a relief. The Apple shares gained more than 3% in extended trading.
Although it’s doing better than some tech peers, Apple has become more cautious as it grapples with a faltering economy. The iPhone maker plans to cut hiring and spending for some teams in 2023, Bloomberg reported earlier this month.
Before reporting results on Thursday, Apple shares had fallen 11% this year, performing slightly better to the S&P 500 index.
Apple struggled to get enough supply last quarter after security measures China against COVID-19 they closed some factories and hampered deliveries. These problems have lessened, but they are not over.
China’s tough stance against the virus led to some production restrictions for supplier Foxconn just this week. The manufacturer, along with several others in the area, were forced to operate in a “closed loop” system for seven days. This means that factory workers cannot have contact with people outside their factories during this time.
Apple has also had few new products to attract customers in recent months. The company launched a iPhoneSE updated in March and is expected to launch new iPhones in September, missing the quarter that just ended.
Even so, this product has generated $40.7 billion last quarterbeating estimates of around 39 billion.
Qualcomm added to investor concerns about the smartphone market on Wednesday, when the chipmaker said consumer appetite for the devices had slowed. But the company said demand was particularly weak for entry-level and mid-range phones running Android, rather than the iPhone.
Last quarter sales of digital services such as iCloud, AppleCare, Apple TV+ and Apple Music they rose 12% to $19.6 billion during the period. That made it Apple’s fastest-growing category, but the division fell short of Wall Street’s forecast of around $19.7 billion.
Apple’s wearables, home products and accessories, the division that includes its smartwatch, HomePod, AirPods and Beats headphones, had sales of $8.08 billion last quarter. Wall Street had requested some $8.8 billion.
Apple earned $7.38 billion from the Mac, missing forecasts by around $8.45 billion. The company launched new MacBook Pro and MacBook Air models in July, but these did not contribute to the latest results as the quarter ended in June.
That means many consumers have likely stopped buying older versions of Apple’s two most popular Macs, hurting this category.
The Cupertino, Calif.-based company is planning a slew of new Macs over the next few months, including high-end MacBook Pros, an iMac, upgraded Mac minis and a refreshed Mac Pro, Bloomberg reported.
The iPad, which performed very well during the height of the COVID-19 lockdowns, has regressed to pre-pandemic levels. Even so, it generated 7.22 billion last quarter, above the estimate of 6.93 billion. The company last updated the iPad in March with a new iPad Air model with an M1 chip. And he’s planning faster iPad Pro models for later this year.
Ongoing COVID restrictions in China have raised concerns about the effect on consumer spending. In a sign that Apple has had to get more aggressive in this market, it is currently slashing the price of the iPhone, Apple Watch and AirPods in China for a few days in a one-time sale.
Apple generated $14.6 billion domestically in the third quarter, less than a year earlier but better than analysts had expected.