Apple still thriving as economy slows, despite 3Q profit dip

Jul 28, 2022, 1:56 PM | Updated: Aug 5, 2022, 6:08 am

BERKELEY, Calif. (AP) — Apple’s profit slipped during the past quarter, but the world’s largest technology company is holding up better than many of its peers as the economy teeters on the edge of a recession.

While grappling with manufacturing headaches and inflation pressures that have vexed a wide range of businesses, Apple saw its profit for the April-June period decline by 10% while revenue edged up 2%. Both figures were better than analysts projected.

The results announced Thursday for Apple’s fiscal third quarter weren’t a shock. That’s because Apple had already warned that its revenue would be depressed by as much as $8 billion because of supply chain problems that have been compounded by pandemic-related shutdowns in Chinese factories that make iPhones and other Apple products.

That scenario played out as expected in Apple’s fiscal third quarter. Earnings fell to $19.4 billion, or $1.20 per share, while revenue edged up to nearly $83 billion.

The positive surprise helped boost Apple’s stock price by 3% in extended trading after the numbers came out.

“The quarter shows that amid all this volatility in tech, Apple remains a fortress,” said Edward Jones analyst Logan Purk.

As usual, Apple’s results were propelled by the iPhone, which posted a 3% gain in sales from the same time last year. Analysts had been bracing investors for a slight decline because of supply chain issues and the upcoming release of a new model this fall. It marked the seventh consecutive quarter that iPhone sales have increased.

The ongoing demand for iPhones underscores the enduring appeal of a device that has helped has established Apple as the world’s most powerful tech company during the past 15 years. The device’s sales climbed, despite inflation hovering at its highest rate i n more than 40 years, a development that caused consumers to rein in their spending on a variety of discretionary items such as clothing and other home goods that enjoyed an uptick in demand during the pandemic.

The troubles emerging in corporate earnings reports over the past two weeks — combined with other sobering data — have heightened worries that the Federal Reserve Bank’s inflation-fighting increase in interest rates will shove the economy into a recession. That would weigh on corporate profits and already drooping stock prices.

Apple CEO Tim Cook acknowledged that the Cupertino, California, company isn’t immune to the current economic turbulence squeezing consumer budgets, but maintained a mostly upbeat tone during a Thursday conference call.

“When you think about the number of challenges in the quarter, we feel really good about the growth that we put up,” Cook said.

So far, Cook said, inflation seems to be affecting Apple’s sales of wearable technology — a segment that includes the Apple Watch — more than those of the iPhone. In the past quarter, revenue in Apple’s wearables division fell 8% to $8.1 billion.

On the upside, Apple expects supply-chain issues to ease during the current July-September quarter. If history is any guide, the release of its next iPhone model later this year could spur another flurry of upgrades. Apple expects its year-over-year revenue growth in the current quarter to exceed the past quarter’s 2% uptick, according to Luca Maestri, Apple’s chief financial officer.

Tech stocks have been particularly hard hit by market jitters. The Nasdaq composite index, which is tethered to the tech industry’s fortunes, has fallen by 22% so far this year. Apple had held up far better than most of its tech peers, with its stock price declining 11% this year before Thursday’s rally in extended trading..

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Colorado River settlement center of new Navajo Nation push...

Associated Press

Tribes say their future is at stake as they push for Congress to consider Colorado River settlement

Navajo officials are celebrating the signing of legislation outlining a proposed Colorado River settlement that would ensure water rights.

2 days ago

Arizona doctors California abortions...

Associated Press

Arizona doctors can come to California to perform abortions under new law signed by Gov. Newsom

Arizona doctors can temporarily come to California to perform abortions for their patients under a new law signed by Gov. Gavin Newsom.

3 days ago

Father convicted of first-degree murder in northern Arizona...

Associated Press

Arizona man convicted of first-degree murder in starvation death of 6-year-old son

A northern Arizona father was convicted of first-degree murder Thursday in the 2020 starvation death of his 6-year-old son.

3 days ago

Former President Donald Trump sits in a courtroom next to his lawyer Todd Blanche before the start ...

Associated Press

Trump hush money trial enters new phase after defense rests without testimony from former president

Donald Trump's hush money trial is now closer to the moment when the jury will begin deciding the former president's fate.

5 days ago

UoA student convicted of first-degree murder after killing professor...

Associated Press

Former Arizona grad student convicted of first-degree murder in 2022 shooting of professor

A former University of Arizona grad student was convicted of first-degree murder after fatally shooting a professor on campus two years ago.

5 days ago

Rudy Giuliani bankruptcy filing defamation lawsuit...

Associated Press

Ex-NYC Mayor Rudy Giuliani, Arizona’s Kelli Ward plead not guilty in fake elector case

Giuliani appeared remotely for the arraignment that was held in a Phoenix courtroom. His trial will take place in October.

6 days ago

Sponsored Articles


Condor Airlines

Condor Airlines can get you smoothly from Phoenix to Frankfurt on new A330-900neo airplane

Adventure Awaits! And there's no better way to experience the vacation of your dreams than traveling with Condor Airlines.



Here are 5 things Arizona residents need to know about their HVAC system

It's warming back up in the Valley, which means it's time to think about your air conditioning system's preparedness for summer.


DISC Desert Institute for Spine Care

Sciatica pain is treatable but surgery may be required

Sciatica pain is one of the most common ailments a person can face, and if not taken seriously, it could become one of the most harmful.

Apple still thriving as economy slows, despite 3Q profit dip