Apple’s January-March quarter, profits and sales hit record highs Impact of supply constraints expanding | Reuters

[Oakland (California, USA) 28th Reuters]–In the second quarter (January-March) financial results announced by Apple on the 28th, profits and sales reached record highs. While managing the semiconductor shortage well, the strong sales of iPhone boosted the business performance.

In the second quarter (January-March) financial results announced by Apple on the 28th, profits and sales reached record highs. Taken in September 2019 (2022 Reuters / Stephen Lam)

However, management has indicated that production and demand will decline in China, which is subject to the new coronavirus-related regulations, the impact on sales due to the Ukraine conflict, and the growth of the service business will not even slow down. It fell by 1%.

Earnings were $ 25 billion ($ 1.52 per share), up from the expected $ 23.2 billion ($ 1.43 per share).

Sales were $ 97.3 billion, up 8.6% year-on-year. It surpassed the average analyst estimate of $ 93.89 billion compiled by Refinitiv.

Luca Maestri, chief financial officer, said the suspension of sales in Russia, which invaded Ukraine, had an impact on sales, and said the impact would be greater this quarter (April-June). showed that.

In addition, supply network problems are expected to push sales in the third quarter down by $ 4-8 billion, and the impact will be “significantly larger” than in the second quarter.

He pointed out that supply problems are concentrated in the area of ​​Shanghai, China, reflecting the confusion caused by the new corona and the shortage of semiconductors. He said Corona is also influencing demand in China.

Tim Cook, CEO, said almost all of the final assembly plants for the company’s products in China resumed production after Corona shut down. However, he did not give any outlook on when to solve the semiconductor shortage, but only stated that he hoped that the problems related to corona would be “temporary” and “improved over time.”

“We wanted a more detailed explanation of what’s really happening in China, but we couldn’t get it,” said Luis Navelia, chief investment officer of Navelia & Associates, and Apple’s outlook is clear. He said that he lacked.

Kim Kooie Forest, CIO of Bokeh Capital Partners, said he was able to manage the supply network in the second quarter, but current demand remains a major issue.

Second-quarter iPhone sales increased 5.5% to $ 50.6 billion. It exceeded the expected average of $ 47.88 billion.

Sales of the tablet terminal “iPad” decreased by 2% to $ 7.65 billion due to restrictions on the supply network. However, it exceeded the analyst’s average of $ 71.4 billion.

Sales of the personal computer “Mac” increased by 14.7% to $ 10.4 billion. The forecast was $ 9.25 billion.

Sales of peripherals such as wearable handsets and speakers increased 12% to $ 8.8 billion. The forecast was $ 9.05 billion.

Sales of the service business, including paid apps such as “Apple TV +”, “Apple Music” and “Apple Fitness”, increased 17% to $ 19.8 billion. It was slightly above the expected average of $ 19.10 billion.

The number of paid contracts for at least seven services is 825 million. It increased by 40 million from the previous quarter.

Sales by region increased by 19% in the Americas. Europe and China were up by single digits.

Mr. Maestri said that the growth outlook for the service business will slow down from the second quarter due to the effects of exchange rates and other factors, while maintaining double-digit levels.

Regarding rising inflation, he said that demand, centered on the iPhone, has been stronger than initially expected, but that inflation is having an impact on costs.

“We’re watching (inflation and consumer trends), but the main focus right now is on the supply side,” Cook said.

Apple announced a 5% dividend increase. The board also announced that it has approved an additional $ 90 billion share buyback.

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