Apple Computer Company was established by Ronald Wayne, Steve Jobs, and Steve Wozniak on 1st April 1976. Wozniak and Jobs incorporated it as Apple Computer, Inc. in 1977. In addition, Apple Inc. is the most significant information technology firm in terms of revenue, with the US $365.8 billion in 2021. It is an American multinational technology company specializing in online services, software, and consumer electronics. The Apple Company is one of the big five American information tech companies, including Amazon, Meta, Microsoft, and Alphabet.
Apple Company reported that its revenue increased nearly 9% in the March quarter over the previous year. This is despite investor concerns about weakening macroeconomic factors affecting demand for high-end computers and smartphones. However, Apple shares declined around 4% in extended-hours trading after Luca Maesri, Apple’s Chief Financial Officer, warned about several problems in the current quarter, including the constraints related to Coronavirus disease (Covid-19), that could harm sales by $4 billion and $8 billion. The tech giant also mentioned Covid-related restrictions as a reason for China’s slowdown in demand.
Tim Cook, Apple’s CEO, stated that the company was “not immune” to supply chain issues.
Here’s how Apple fared against Refinitiv’s consensus forecast:
- Revenue: $97.28 billion vs. $93.89 billion anticipated, up nearly 8.59% year-over-year.
- Earnings per Share (EPS): $1.52 vs. $1.43 projected.
- Services Revenue: $19.82 billion vs. $19.72 billion anticipated, up approximately 17.28% year-over-year.
- iPhone Revenue: $50.57 billion vs. $47.88 billion projected, up around 5.5% year-over-year
- Other Apple’s Products Revenue: $8.81 billion vs. $9.05 billion anticipated, up approximately 12.37% year-over-year.
- iPad Revenue: $7.65 billion vs. $7.14 billion projected, down nearly 1.92% year-over-year.
- Mac Computer Revenue: $10.44 billion vs. $9.25 billion anticipated, up approximately 14.73% year-over-year.
- Gross margin: 7% vs. 43.1% projected.
Apple didn’t provide a forecast for this quarter, as the company hasn’t provided official guidance on revenue since February 2020. This was due to uncertainty related to the pandemic.
Furthermore, Apple’s board of directors approved $90 billion in share buybacks. This keeps Apple at the top of the list of public companies that invest most in buying their own shares. According to Dow Jones and S&P Indices, it spent around $88.3 billion on buybacks in 2021.
Apple Company raised its dividend by 5% to 23 cents per share.
The smartphone business rose by more than 5% in the quarter. This further supports the fact that the recent iPhone 13 model is selling well. Tim Cook stated that the iPhone business experienced an excellent quarter due to switchers, or people who have previously owned an Android smartphone but decided to buy an iPhone.
Tim Cook told a news channel that “We had a record-breaking number of upgraders in the quarter, and we increased switchers strongly in double digits.”
According to the earnings beat, Apple’s premium smartphone market may have been protected from concerns over a decline in consumer confidence. The iPhone sales increased despite a challenging year-over-year iPhone comparison, as the new iPhones were released earlier in 2021.
Cook further stated that “It’s clearly a robust cycle.”
On the other hand, Mac computers continued to rose strongly after Apple Company switched to its own M1 chips instead of Intel central processing units. Mac computer sales increased approximately 15% year-over-year to $10.44 billion. However, Apple’s iPad business is still struggling, with sales dropping 2.1% compared to a year ago despite new models that include Apple’s, M1 Chip. Cook stated that the iPad business faced “very significant supply limitations” in the third quarter.
Apple’s services business, including licensing fees, subscriptions, and extended warranties, thrives, with an average of 17% growth. But, over the last two years, the company has made it a habit to beat Wall Street estimations by a 3% to 8% range growth.
“The comparable services are a little unusual during Covid-19 because there have been lockdowns, reopening, etc.” Apple CFO Maestri said on the news channel. He further stated that “digital content soared through the ceiling” during specific periods over the past two years.
Tim Cook stated that Apple’s financial performance was “better than estimated.” The United States was the fastest-growing region, with sales increasing around 20% in the quarter to $50.57billion. Greater China, including Taiwan and Hong Kong, rose at a slower growth rate of 3.47% to$18.34 billion. Cook further said that Covid-19-related lockdowns did not affect Apple Company during the quarter.