Despite an otherwise brutal earnings season for IT companies and concerns that demand for the most recent iPhone models may have been weaker than anticipated, Apple exceeded Wall Street analysts’ sales and income projections for the quarter that ended in September.
During its fiscal fourth quarter, the IT giant reported sales of slightly over $90 billion, an increase of 8% from the same period in the previous year. Profits increased by slightly under 1% from the same quarter last year to $20.7 billion.
“Our record September quarter results continue to demonstrate our ability to execute effectively in spite of a challenging and volatile macroeconomic backdrop,” Apple CFO Luca Maestri said in a statement.
Apple (AAPL) shares dipped just over 1% in after-hours trading Thursday following the report.
Sales from Apple’s products segment grew 9% year-over-year to nearly $71 billion, a decline in growth rate from the prior year but one that was not unexpected. There had been concerns about how well Apple would persuade people to fork over cash for a gadget upgrade while they struggled with rising inflation, fears of a potential recession, and, outside of the United States, an exceptionally strong dollar.
Like other major tech companies, even Apple is suffering from the negative impact of a worsening macro backdrop and ongoing supply chain woes, though it has done a better job of navigating through the challenging environment.Jesse Cohen
During a call with analysts following the report, CEO Tim Cook said that the company hit a September quarter revenue record for iPhone.
The company’s services segment, which includes paid subscriptions to products like Apple TV+ and Apple Music, posted $19.2 billion in sales, up nearly 5% from the year-ago quarter, marking a decline in growth rate from the prior year. The services segment is viewed as an increasingly important unit for the company, designed to offset slowing growth in parts of its hardware business.
Apple now has more than 900 million paid subscriptions across its services, up 155 million from a year ago, Maestri said.
Apple earlier this week raised the prices for its music and TV streaming services, which could help boost sales going forward.
“Like other major tech companies, even Apple is suffering from the negative impact of a worsening macro backdrop and ongoing supply chain woes, though it has done a better job of navigating through the challenging environment,” Investing.com analyst Jesse Cohen said in a statement.
Apple declined to provide revenue guidance for the all-important holiday quarter. However, Maestri said it expects year-over-year revenue growth to decelerate in the December quarter compared to the September quarter, citing the strength of the US dollar and ongoing macroeconomic weakness.