Apple's iPhone sales boost its quarterly earnings
Apple has announced its second-fiscal quarter earnings on Thursday, beating Wall Street's expectations for sales and revenue. The company reported a 2% increase in iPhone revenue, despite a shrinking smartphone market. However, Apple's overall sales declined for the second consecutive quarter, as its Mac and iPad segments faced supply chain challenges and tough comparisons with last year.
According to Refinitiv consensus estimates, Apple posted the following results:
- EPS: $1.52 vs. $1.43 expected
- Revenue: $94.84 billion vs. $92.96 billion expected
- Gross margin: 44.3% vs. 44.1% expected
Apple also reported $24.16 billion in net income during the quarter, compared to $25.01 billion in the same period last year.
The highlight of Apple's report was its iPhone business, which grew from the year-ago quarter even as the broader smartphone industry contracted nearly 15%, according to an IDC estimate. Apple attributed the strong performance of its flagship product to the popularity of its iPhone 12 lineup, which features 5G connectivity and a new design.
"It was quite a good quarter from an iPhone point of view, particularly relative to the market when you look at the market stats," Apple CEO Tim Cook told CNBC's Steve Kovach.
Apple's other product lines did not fare as well as the iPhone. The company's Mac and iPad segments saw significant declines in revenue, partly due to parts shortages that affected their production and availability. Apple's Mac revenue fell more than 31% to just over $7.17 billion, while its iPad revenue dropped more than 28% to $6.67 billion.
Cook said that the supply constraints impacted both product categories, but he was optimistic that the situation would improve over time.
"We're working very hard to mitigate whatever set of circumstances we're dealt," Cook said.
Apple's services and other products segments also missed analysts' expectations, but they still showed growth from last year. Apple's services revenue, which includes its App Store, iCloud, Apple Music, and Apple TV+, rose 9% to $20.91 billion. Apple's other products revenue, which includes its AirPods, Apple Watch, and HomePod, increased 13% to $8.76 billion.
Apple did not provide formal guidance for its next quarter, continuing its practice that dates back to 2020 and the start of the Covid-19 pandemic. However, Cook said that he expects revenue growth to accelerate from the March quarter, driven by strong demand for its products and services.
"We feel very good about where we are," Cook said.