I managed to deliver another impressive earnings report. For the March quarter, the company beat expectations in almost all areas, with big beats for its iPhone, Mac and iPad business.
As expected, Apple (stock ticker: AAPL) also raised its dividend and announced an expansion of its share buyback program.
Shares initially rose 2.2% in after-hours trading, although they slipped into negative territory as the company began calling its earnings, and losses widened to nearly 4% after the company made cautious comments on the outlook for the June quarter, without providing guidance. specific. In particular, the company warned that results will slow due to supply restrictions, business suspensions in China and negative currency factors.
For the second fiscal quarter ended March 26, Apple reported revenue of $97.3 billion, up 9% from a year ago, and ahead of Wall Street expectations of $94 billion. Earnings of $1.52 a share, a dime a dozen above Wall Street expectations of $1.42 a share.
The strong quarter was highlighted by the company’s flagship iPhone business, which had sales of $50.6 billion, an increase of 5.5%, well above analysts’ expectations of $48.4 billion. This is a great result in the face of the widespread shortage of components that has stymied the growth of many other device manufacturers.
Mac sales came in at $10.4 billion, up 14.6%, and above the Wall Street consensus of $9.1 billion. iPad sales came in at $7.6 billion, down 2%, but still above estimates of $7.2 billion. For wearable devices, which include AirPods and Apple Watch, sales were $8.8 billion, up 12.4%, and felt just below Wall Street expectations of $8.9 billion.
Services revenue was $19.8 billion, up 17.3%, and slightly above analysts’ expectations of $19.7 billion. The company ended the quarter with more than 825 million subscribers on various services, an increase of more than 165 million over last year.
Apple indicated that it had a record quarter for services, with quarterly records for iPhone, Mac and wearable devices.
Apple also announced a 5% increase in its quarterly dividend rate to 23 cents. The company said it has expanded its share buyback program by $90 billion. The company repurchased $22.9 billion of stock in the March quarter and closed the quarter with a net cash of $73 billion.
A quarter ago, Apple Chief Financial Officer Luca Maestri said that supply constraints in the March quarter would ease from the December quarter, but he also noted that Apple faced a difficult comparison a year ago: revenue in the March 2021 quarter jumped 54%, as Mac revenue rose And iPad sales soared in the middle of the pandemic.
Maestri also forecast a two-percentage-point drop in the top-line growth of the coin, but did not address the coin’s problem in the earnings statement. Note that unfavorable currency factors affected the results of several technology companies this quarter.
Microsoft
Already warned of a potential foreign exchange hit, and The effect turned out to be worse than expected.
In a Thursday afternoon call with investors, Maestri said the company expects an impact of $4 to $8 billion on June quarter revenue from supply restrictions — “significantly greater” than it had in the March quarter. He also said the Covid-related lockdowns are having some impact on customer demand in China.
Maestri added that the company expects nearly 3 percentage points of foreign exchange headwinds. He said the suspension of sales in the Russian language would reduce sales by about 1.5 percentage points. Apple’s chief financial officer added that the company sees double-digit growth in services in the quarter, but slower than in the March quarter.
So far, Apple shares are down just over 10%.
Write to Eric J. Savitz at eric.savitz@barrons.com
