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Apple sales fall but surpass estimates, guides for low single digit sales in Q3
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
Apple managed $16.4 billion in sales from China, which, despite being lower from last year, managed to surpass expectations of $15.9 billion.
Apple Inc.’s sales fell for the fifth time in the last six quarters but the stock surged in extended trading on hopes that the slump is easing and the company’s announcement of a $110 billion share buyback, the largest in US history.
The iPhone manufacturer reported a 4.3% drop in quarterly revenue to $90.8 billion, but the figure was marginally higher than the analyst expectation of $90.3 billion. Earnings per Share (EPS) for the quarter stood at $1.53, also higher than the $1.5 estimate.
Sales in the quarter gone by also come on a high base, when the company had realised as much as $5 billion in delayed iPhone 14 sales from supply chain issues due to the Covid-19 pandemic.
Apple’s iPhone sales fell nearly 10% to $45.96 billion, suggesting weak demand for the current generation of smartphones that were launched in September last year, although the number met street expectations. CEO Tim Cook said that excluding the late realisations from the base quarter, the iPhone sales would be flat. The iPhone still continues to account for half of Apple’s topline.
The last instance of a new iPad being launched was back in 2022, which has been a drag on sales. iPad sales fell 17% to $5.6 billion. Apple is likely to announce new iPads on May 7.
Slowing sales in China were a big concern for Apple’s investors and data from Counterpoint Research showed that sales of the iPhone had declined by 19% in the January-March period of 2024, the worst since 2020. iPhone shipments had declined 10% worldwide during the quarter.
Yet, Apple managed $16.4 billion in sales from China, which, despite being lower from last year, managed to surpass expectations of $15.9 billion.
There are also talks of the company announcing a foray into Generative AI. CEO Cook is expected to lay out Apple’s AI strategy at its annual Worldwide Developers Conference.
The Vision Pro, which the company launched in February this year is off to a slow start and could take years for it to meaningfully contribute.
While the company did not provide a formal guidance for the June quarter, CEO Tim Cook told CNBC that overall sales will grow in the “low-single-digits.”
Apple also announced a $110 billion share repurchase program, a 22% growth from last year. The stock rose 6.2% in extended trading.
(With Inputs From Agencies.)
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