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Apple (AAPL) earnings Q1 2022

Apple CEO Tim Cook dinner stated on Thursday that the corporate’s provide chain challenges had been enhancing, sending shares up about 5% in prolonged buying and selling, whereas delivering a solid beat on earnings.

Apple beat analyst estimates for gross sales in each product class besides iPads and general income was up 11% yearly.

Right here is how Apple did within the quarter ending Dec. 25 versus Refinitiv consensus estimates:

  • EPS: $2.10 vs. $1.89 estimated, up 25% year-over-year
  • Income: $123.9 billion vs. $118.66 billion estimated, up 11% year-over-year
  • iPhone income: $71.63 billion vs. $68.34 billion estimated, up 9% year-over-year
  • Providers income: $19.52 billion vs. $18.61 billion estimated, up 24% year-over-year
  • Different Merchandise income: $14.70 billion vs. $14.59 billion estimated, up 13% year-over-year
  • Mac income: $10.85 billion vs. $9.52 billion estimated, up 25% year-over-year
  • iPad income: $7.25 billion vs. $8.18 billion estimated, down 14% year-over-year
  • Gross margin: 43.8% vs. 41.7% estimated

Apple once more didn’t present official steering about expectations for the present quarter. Apple hasn’t supplied steering because the begin of the Covid-19 pandemic, citing uncertainty.

Apple CEO Tim Cook dinner did present a forward-looking knowledge level in an interview with CNBC’s Julia Boorstin.

“What we count on for the March quarter is strong year-over-year income development,” Cook dinner stated. “And we count on provide constraints within the March quarter to be lower than they had been within the December quarter.”

Apple CEO Tim Cook dinner speaks with guests on the new Apple Retailer on Broadway in downtown Los Angeles, California, June 24, 2021.

Lucy Nicholson | Reuters

It was one other sturdy exhibiting for Apple in its most necessary quarter of the yr which incorporates vacation gross sales. Each one among Apple’s product traces grew year-over-year from final yr, apart from iPad gross sales, regardless of administration warnings from October that provide points may harm the corporate’s gross sales.

Cook dinner stated that the corporate’s provide points had been enhancing. He stated that by way of provide challenges, the December quarter was worse than Apple’s September quarter, however that he’s projecting the March quarter to enhance.

“Our largest problem is chip provide, it is chip provide on legacy nodes,” Cook dinner stated. “And we’re doing okay on the forefront stuff.”

Forefront chips are the highly effective processors on the coronary heart of a telephone, whereas “legacy node” chips are the opposite, much less subtle components that run capabilities like driving shows or managing energy.

Apple launched new iPhone fashions in September, and this quarter was the primary full quarter of iPhone 13 gross sales, giving buyers a preview of how aggressive the gadgets are available in the market. Gross sales had been up 9% yearly to $71.63 billion, though they’re rising slower than Apple’s general enterprise.

Cook dinner stated that Apple was pleased with the 9% enhance in iPhone gross sales. “That is regardless of having provide constraints throughout the quarter,” Cook dinner stated.

Providers, which embrace iCloud, Apple Music, search licensing and App Retailer charges, continued rising strongly, rising 25% yearly to $19.52 billion. Providers is Apple’s most worthwhile enterprise unit and its rise contributed to Apple’s higher-than-expected gross margin.

Apple’s different merchandise class, which incorporates Apple Watch and AirPods, was up 13% year-over-year. This quarter included gross sales from Apple’s newest Collection 7 watch, which has a bigger display screen, and new AirPods.

Macs had the strongest development of any of Apple’s {hardware} traces, rising 25% over final yr to $10.85 billion. In October, Apple launched new MacBook Professional fashions beginning at $1,999 that had been well-received and featured a brand new Apple chip as a substitute of an Intel chip.

iPads had been essentially the most notable disappointment. Gross sales shrunk from final yr, and missed analyst estimates, however it was doubtless as a result of Apple couldn’t make sufficient iPads and prioritized different gadgets. Cook dinner attributed the iPad outcomes to “vital” provide constraints.

Cook dinner additionally instructed CNBC that Apple was seeing inflationary strain.

“I believe all people’s seeing inflationary strain,” Cook dinner stated. “There isn’t any two methods about that.”

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