After a year of blistering sales growth, Apple showed that it has a more resilient business than many of its tech peers, even though it cooled off in the first three months of the year.
The company reported on Thursday that profit rose 6 percent to $ 25 billion In its second fiscal quarter, a slowdown from the double-digit growth in each of the previous five quartersGeneral Chat Chat Lounge Sales increased 9 percent to $ 97.29 billion, exceeding analysts’ expectations, as pandemic-fueled purchases of iPads and Macs slowed from a year ago.
Tim Cook, Apple’s chief executive, cautioned investors about the months ahead, telling Wall Street analysts that an accelerating Covid outbreak in China will curtail demand and impair production of iPhones, iPads and Macs. He said the supply-chain problems are expected to reduce sales in the current quarter by $ 4 billion to $ 8 billion.
“I think we’re doing a reasonable job currently navigating what’s a challenging environment,” Mr. Cook said noting that “almost all” of the facts are Apple relies on the Shanghai region to restart production.
The company’s shares fell about 4 percent in after-hours trading, giving up much of Apple’s gains earlier in the day.
The The results added to a week of uneven financial reports from leading technology companies that have struggled to sustain last year’s explosive growth. Google’s parent company, Alphabet, and Facebook’s parent, Meta, had reported profit declines from a year ago, while Microsoft posted a rise in profit.
The pandemic has been a double-edged sword for Apple. Remote school and work spurred demand for computing equipment, and government stimulus checks and cutbacks provided travel and leisure spending a jolt to the company’s all-important iPhone business, analysts said. But those same forces sowed supply-chain problems, triggering a global chip shortage that has cost Apple billions of dollars in missed sales.
In addition to highlighting the challenges it faces in China, Apple said total revenue in the current quarter will be crimped by its decision to stop selling products in Russia because of its invasion of Ukraine. Apple counts on Russia for 1 percent of its sales and a slightly larger percentage of its profits, analysts estimate.
During the January-to-March quarter, sales of iPhones, iPads and other devices rose 6.6 percent to $ 77.5 billion, Apple said.
The bigger problem for Apple may come in the months ahead as economic strains from the Ukraine spill into Europe, said Gene Munster, a longtime Apple analyst and managing partner at venture-capital firm Loup Ventures. “People are on edge,” he said. “They’re paying more for fuel. If you live in Germany, does that affect your decision to buy the next iPhone? “
To diversify beyond device sales, Mr. Cook has pushed a growing array of software and services across Apple products worldwide. Last year, people sequestered at home splurged on apps, video games and subscriptions such as HBO Max. But amid the return to work and school, Apple said sales growth slowed its so-called services business, recording $ 19.82 billion revenue during the quarterGeneral Chat Chat Lounge
The company said it would increase its cash dividend by 5 percent and increase its share repurchases by $ 90 billion.