Apple shares have risen 3% after the big iPhone maker reported an 11% fall in profit despite sales holding up.
Revenue rose 1.87% to a new fiscal third-quarter record of US$83 billion from US$81 billion a year ago.
Analysts had predicted a 1.7% rise with China being a major contributor to sales.
The US company said overnight that profits fell to $19.4 billion, a 10.6% decline from a year ago and the worst quarter since the July-through-September period in 2020 ahead of the 5G-capable iPhone launch.
Chief Executive Tim Cook says there isn’t ‘obvious evidence’ that macroeconomic factors are affecting smartphone sales
He added “We are seeing some pockets of softness here and there. But in the aggregate, we expect revenue to accelerate in the September quarter as compared to the June year-over-year performance.”
IPhone sales, which are Apple’s biggest driver of revenue, rose 2.8% while analysts had expected a 2.5% drop.
Sales of iPad tablets, Mac computers and wearables were affected by supply constraints, Mr. Cook said.
In Australia Apple has been pushing stock through their own stores with a limited stock hitting mainstream CE retailers such as JB Hi Fi.
“There is no obvious evidence in our data that there is macroeconomic effect on iPhone sales,” Mr. Cook said. “On iPad and Mac, frankly, we didn’t have enough data from a supply point of view to really test the demand.”
Apple is seeing signs of the economy affecting sales in its wearables category and among some services, such as ads, he said.
Apple shares rose by more than 3% in after-hours trading.
Arch rival Samsung Electronics the world’s biggest maker of semiconductors, smartphones and televisions, lowered expectations for industrywide smartphones this year in a statement issued yeaterday.
Shipments will be flat or experience minimal growth, the South Korean company said, after saying in April it expected growth.
The WSJ repoers that in late 2020, Apple introduced iPhones with 5G capabilities that were touted as offering faster internet speeds to improve gaming and downloads, helping spark renewed interest in the gadget and fueling a record fiscal 2021 profit of $94.7 billion.
Analysts are predicting iPhone profit for fiscal 2022, which ends in September, will be near $100 billion after a strong first half.
As markets react to inflation and high interest rates, technology stocks are having their worst start to a year on record.
China, which has seen strict Covid-19 shutdowns, was expected to be a drag on Apple’s results after helping fuel record growth.
Apple had warned in April that Covid-related supply disruptions around Shanghai and silicon shortages would hurt the company’s inventory and hinder sales by between $4 billion and $8 billion. Chief Financial Officer Luca Maestri also had warned that foreign-exchange rates and paused sales in Russia following the war in Ukraine would also limit growth.
On Thursday, Mr. Cook said those constraints were “slightly less” than what was predicted.
In recent days, Apple has taken the unusual step of discounting iPhones in the China market.
Goldman Sachs estimates that iPhone China shipments improved in the month of May compared with April, when they fell 39%.
“Our checks suggest an even stronger sales momentum in June as lockdowns were further reduced, likely driving realization of pent up demand,” Rod Hall, a Goldman Sachs analyst, wrote in a note to investors this month.
Mr. Cook said the company is seeing inflationary costs in wages, logistics and certain silicon components. The company finished the previous fiscal year with 154,000 employees, according to a regulatory filing.
“We are making deliberate decisions about where to invest our money, but we’re continuing to hire, but we’re just doing it in a very deliberate way,” Mr. Cook said in the interview.
