- On Thursday, Apple announced its earnings for the second fiscal quarter, which exceeded Wall Street’s soft expectations, as they were anticipating higher iPhone sales.
- However, Apple’s overall sales declined consistently in the second quarter.”
- On Thursday, the earnings for the second fiscal quarter were reported, which exceeded Wall Street’s soft expectations from the estimated iPhone sales. Apple’s CEO, Tim Cook said that the quarter was better than our expectations.
- However, Apple’s overall sales declined consistently in the second quarter. The shares of tech giants saw an increase of nearly 2% in extended trading, and the rise continued when Apple released data points on the current quarter.
It is stated here how the company met the expectations of Wall Street according to Refinitiv consensus:
EPS: $1.52 per share vs. expected $1.43
Revenue: $94.84 billion vs. expected $92.96 billion
Overall margin: 44.3% vs. expected 44.1%
During the quarter, Apple reported a net income of $24.16 billion, down from $25.01 billion in the same period a year ago. Total revenue in the previous quarter was 3% less than $97.28 billion.
It is stated here how Apple’s individual product lines performed against the consensus expectations of Wall Street:
- iPhone revenue: $51.33 billion vs. expected $48.84 billion
- Mac revenue: $7.17 billion vs. expected $7.80 billion
- iPad revenue: $6.67 billion vs. expected $6.69 billion
- Other products revenue: $8.76 billion vs. expected $8.43 billion
- Services revenue: $20.91 billion vs. expected $20.97 billion
Apple did not provide formal guidance, sticking to its practice until 2020 and the start of the COVID-19 pandemic. Management typically provides some data points on calls with analysts.
Apple CFO Luca Maestri said the company expects a nearly 3% decline in total revenue in the current quarter.
Maestri said on a call with analysts, “We expect our June quarter revenue performance to be strong year over year, assuming that our stores are open,” given the lapping of the pandemic impact.
Apple’s Mac and iPad businesses also did not give out rent. The company had warned in the previous quarter that there would be a decline in both the professional sectors, partly due to a shortage of components. However, they fell more than expected.
Sales of Apple’s Mac decreased by more than 31% to just $7.17 billion. But this is a tough comparison to a year ago when Apple was still benefiting from the pandemic boost in PC sales and changes in their own chips that provide long battery life for laptops.
Cook said, “There are two reasons for this. One is generally the macro situation. And the second is where we’re still comparing the M1 MacBook Pro 14 and 16-inch to a year ago.”
Revenue from iPads dropped by nearly 13% to $6.67 billion.
Apple’s services business includes monthly subscriptions, revenue from Apple’s App Store, warranties, and licensing revenue from companies like Google. Apple reported $20.9 billion in revenue from services, which is a year-on-year increase of 5.5%, indicating that the company’s highest-margin business line continues to grow steadily.
Apple’s wearable division, including products like the Apple Watch and AirPods, fell 1% during the quarter, disappointing analysts’ expectations. In the previous decline, the company released another expensive Apple Watch called the Ultra.