Apple Inc. beat market estimates after recording an 11% growth in the last quarter. The shares rallied on wall street, signaling a victory against the supply chain crunch of chips.
As per Bloomberg News, the company rechttps://businessupside.com/food-to-become-the-next-supply-chain-crunch-as-people-hoard/orded $123.9 billion in sales against analysts’ average prediction of $119.1 billion. Profits also surpassed projections, and the company predicted it would achieve double-digit growth by March quarter.
Last year, CEO Tim Cook had warned that the chips shortage would affect sales to the tune of $6 billion. However, the tech giant navigated the upheaval and benefited from its new products such as iPhone 13 and Apple Watch Series 7.
Apple shares gained 5.8% to close at $168.38 Thursday trading. This year before the result announcement, it had fallen by 10%. In 2021, the stock gained 34%.
Apple’s market value is now $2.6 trillion after peaking at $3 trillion in early January. Investors have been looking up to it for reassurance after tech stocks got battered recently. Sales slowdown and impending interest rate hikes have made the sector less appealing.
Apple’s earnings per share rose to $2.10 in the first quarter, which ended on Dec 25, compared to analysts’ estimate of $1.90. Apple’s executive said on a conference call that the supply chain constraint will ease further thought growth rate will deaccelerate. Though analysts predict that revenue will top $90 billion, no specific sales target was given. As per Apple, the gross margin will be between 42.5% to 43.5%.
Apple currently has 1.80 billion apple devices in use, with a growth of 300 million in two years. Paid Apple Subscribers and third-party subscriptions are 785 million, up from 745 million from the previous quarter.
The company earned $71.6 billion from iPhone sales alone, beating wall street estimates of $67.7 billion and up by 9.2% from previous years’ same period. The entire iPhone 13 line contributed to the strong performance. The new iPhone 13 series went on sale in September with modest updates; users look forward to upgrading to 5G services with this device.
The supply chain constraints delayed shipment by several weeks for iPhone 13, Mac and Apple watch. The results have come as a relief to investors though iPad sales were lower than projected. iPad sales were $7.25 billion compared to estimates of $8.1 billion. The company launched the iPad mini update in the quarter with a minor upgrade to its cheapest tablet but still struggled to get enough supply to the market. Chief Financial Officer Luca Maestri said that the iPad shortage was pronounced, and CEO Cook said some key components were diverted to the iPhone, causing the constraint.
In the services division, apple generated $19.5 billion in revenue in quarter one, beating estimates of $18.6 billion. Strong apple music, App Store, and iCloud subscription resulted in a 24% growth from it an earlier year. As per the company, developers generated $60 billion from the App Store in 2021.
The home, accessories, and wearable division includes Apple Watch, Air Pods, Apple Tv, Home Pod, Beats Headphones produced $14.7 billion during the quarter, up 13% from the previous year. The launch of Air Pods earbuds at the end of 2021 boosted the Air Pods earnings of this category though the apple watch series 7 faced shortages and was delayed in release.
The company reported Mac Sales of $10.9 billion, which beat estimates of $9.5 billion with a growth of 25% annual growth. The new MacBook Pro was well-received by reviewers and consumers.
