Apple’s revenue and profit edge up despite slowing economy

Oct 27, 2022, 2:02 PM | Updated: Oct 31, 2022, 6:43 am
FILE- In this Jan. 3, 2019, file photo the Apple logo is displayed at the Apple store in the Brookl...

FILE- In this Jan. 3, 2019, file photo the Apple logo is displayed at the Apple store in the Brooklyn borough of New York. Apple Inc. reports quarterly financial results after the market close, Thursday, Oct. 27, 2022.(AP Photo/Mary Altaffer, File)

(AP Photo/Mary Altaffer, File)

Apple managed to boost both its sales and profit during a summertime quarter that depressed the fortunes of most other major tech companies, but that doesn’t necessarily mean the iPhone maker will be immune to a potential recession.

Even though Apple fared reasonably well, the July-September results released Thursday signaled that the world’s most valuable company is facing some of the same economic headwinds that hammered the profits of Microsoft and the corporate parents of both Google and Facebook.

Apple’s fiscal fourth quarter revenue rose 8% from the same time last year to $90.1 billion. That was an improvement from the scant 2% uptick in revenue during its April-June quarter when supply problems caused by pandemic-related factory shutdowns dinged its sales.

The Cupertino, California, company’s profit for the most recent quarter totaled $20.72 billion, or $1.29 per share, up by less than 1% from the same time last year.

Both the revenue and earnings per share were slightly above analyst estimates. But on the downside, sales of Apple’s most popular product, the iPhone, and another big moneymaker, and the services division, were both lower than analysts had been anticipating — a sign consumers may be cutting back amid the highest inflation in 40 years.

Apple is facing “increasingly difficult economic conditions,” CEO Tim Cook acknowledged during a Thursday conference call with analysts. “A lot of people in a lot of places are struggling.”

Those challenges are one of the reasons Apple expects its revenue growth to decelerate during the current October-December period, even though this year’s quarter will include one more week than last year’s, Apple’s Chief Financial Officer Luca Maestri warned during conference call. The strong U.S. dollar, which has lowered Apple’s reported sales internationally, is also contributing to the anticipated slowdown.

Investors initially reacted negatively after Maestri’s made that forecast, driving down Apple’s shares by about 3% in extended trading, but seemed to be feeling more optimistic about the company’s prospects by the time management concluded the conference call. Apple’s shares were up by more than 1% late Thursday. Mirroring other once high-flying stocks in tech, Apple’s stock still has dropped almost 20% so far in 2022.

The iPhone — still Apple’s marquee product 15 years after its debut – accounted for most of its success during the past quarter, even though the company didn’t sell quite as many of the devices as analysts had hoped. Boosted by the release of four new models in late September, iPhones sales climbed 10% from the same time last year to $42.63 billion.

But industry analysts are starting to fret over how much longer consumers will splurge on new phones as they feel the pinch of the past year’s stubbornly high inflation rates. If those financial pressures persist, it could cause more households to curtail their spending during the holiday shopping season, especially on the kind of pricey gadgets that are Apple’s cornerstone.

That’s one of the primary reasons the research firm International Data Corp. is now expecting worldwide smartphone shipments this year to fall 6.5% from 2021, a downward revision of three full percentage points — translating into about 150 million fewer devices being sold — from an earlier forecast made in May.

Apple won’t suffer as much as the makers of phones running on Google’s Android operating system, IDC predicted, but it still will result in a significant slowdown. IDC projects iPhone shipments will edge up by less 0.5%, with the average selling price of the device hovering around $950. Through the first nine months of this year, iPhone sales are up 6% from last year.

“We knew Apple’s iPhone business was slowing down, but we’re also starting to see that trickle into their services segment which will be one cause for concern,” said Investing.com analyst Jesse Cohen.

Maestri told analysts that weaker sales of advertising and gaming were the biggest drag on the services division during the most recent quarter.

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

AP

Associated Press

Lapchick focuses on racism impact in his social-justice work

ORLANDO, Florida (AP) — The founder of the institute that examines diversity in sports is taking to Twitter to highlight weekly examples of racism in sports and elsewhere. Richard Lapchick is the founder of The Institute for Diversity and Ethics in Sport (TIDES), which was launched in 2002 at Central Florida. He said TIDES found […]
12 hours ago
President Joe Biden boards Air Force One at Andrews Air Force Base, Md., on Tuesday, Nov. 29, 2022....
Associated Press

US, allies announce plans for second democracy summit

WASHINGTON (AP) — The Biden administration on Tuesday announced plans for a second Summit for Democracy next year, this time to be co-hosted by the governments of Costa Rica, the Netherlands, South Korea and Zambia. The summit will be held March 29 to March 30 in a virtual format and will be followed by hybrid […]
12 hours ago
Associated Press

ND high court asked to lift injunction against abortion ban

BISMARCK, N.D. (AP) — An attorney for North Dakota asked the state Supreme Court on Tuesday to strike down an injunction blocking the state’s abortion ban, saying a lower court judge was wrong to grant it. Matthew Sagsveen, an attorney for the state, told justices that Burleigh County District Judge Bruce Romanick “misconstrued the law” […]
12 hours ago
A fan holds up a scarf prior the start of the World Cup group B soccer match between Iran and the U...
Associated Press

US, Iran fans mingle in Qatar ahead of World Cup clash

DOHA, Qatar (AP) — Smiling U.S. and Iranian fans mingled and posed for photos outside a stadium in Doha ahead of a politically charged World Cup match on Tuesday. The atmosphere was generally festive though the political divisions among Iran fans were apparent outside Al Thumama Stadium, as they have been during previous Iran games […]
12 hours ago
This image released by the University of Nevada, Las Vegas shows Clarence Gilyard, Jr., Associate P...
Associated Press

Clarence Gilyard, ‘Die Hard’ and ‘Matlock’ actor, dies at 66

NEW YORK (AP) — Clarence Gilyard Jr., a popular supporting actor whose credits include the blockbuster films “Die Hard” and “Top Gun” and the hit television series “Matlock” and “Walker, Texas Ranger,” has died at age 66. His death was announced this week by the University of Nevada, Las Vegas, where he taught stage and […]
12 hours ago
An Iranian flag and a scarf depicting U.S. flag are sold at the Souq Waqif Market in Doha, Qatar, T...
Associated Press

US-Iran match reflects a regional rivalry for many Arab fans

BAGHDAD (AP) — The U.S. team’s must-win World Cup match against Iran will be closely watched across the Middle East, where the two nations have been engaged in a cold war for over four decades and where many blame one or both for the region’s woes. Critics of Iran say it has fomented war and […]
12 hours ago

Sponsored Articles

...
Day & Night Air Conditioning, Heating and Plumbing

Prep the plumbing in your home just in time for the holidays

With the holidays approaching, it's important to know when your home is in need of heating and plumbing updates before more guests start to come around.
(Photo via MLB's Arizona Fall League / Twitter)...
Arizona Fall League

Top prospects to watch at this year’s Arizona Fall League

One of the most exciting elements of the MLB offseason is the Arizona Fall League, which began its 30th season Monday.
...
SCHWARTZ LASER EYE CENTER

Key dates for Arizona sports fans to look forward to this fall

Fall brings new beginnings in different ways for Arizona’s professional sports teams like the Cardinals and Coyotes.
Apple’s revenue and profit edge up despite slowing economy