Despite declining profits, Apple saves its quarter thanks to the iPhone

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Apple saw its revenues increase by barely 2% over one year, to 83 billion dollars, between April and June, and its net profit fell by 11%, to 19.4 billion. Results nevertheless better than expected by analysts.

Apple CEO Tim Cook.

© Getty — Justin Sullivan

As with Amazon, the picture is not perfect for Apple, but the Cupertino company manages to withstand the economic slump that currently reigns in the tech world. Admittedly, the American giant saw its revenues increase by barely 2% over one year, to 83 billion dollars, between April and June, and even its net profit fell by 11%, to 19.4 billion at the same time. , but these results exceeded analysts’ expectations. What allow him to reassure the markets, which welcomed his performance by raising the action of the Californian group by 3% after the closing of Wall Street this Thursday, July 28, 2022.

“Our June quarter results continued to demonstrate our ability to effectively manage our business despite a challenging operating environment. We set a revenue record for the quarter ended June and our installed base of active devices reached an all-time high. across all geographic segments and product categories”welcomed Luca Maestri, financial director of Apple. “During the quarter, we generated nearly $23 billion of operating cash flow, returned more than $28 billion to our shareholders, and continued to invest in our long-term growth plans.”he added.

The iPhone stronger than the shortage of semiconductors

Apple can once again thank its cash cow, namely the iPhone. Tim Cook’s star product group still accounts for half of its revenue, generating $40.7 billion in the third quarter of its fiscal year ended in June, more than $1 billion more than the same period last year. Given Apple’s reputation for perfectly managing its supply chains, we won’t call it a feat, but it’s still a hell of a performance in this period marked by a global shortage of electronic components. eternalizes.

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Between April and June, the Californian group suffered from the Chinese authorities’ “zero Covid” strategy; the drastic confinements imposed in several major cities of the country have led to the closure of key factories for the electronics industry. A situation which has aggravated the supply problems and therefore the production of certain Apple products, like the iPhone 13 and, soon, the iPhone 14. The American firm had warned that these difficulties risked cost it between 4 and 8 billion dollars over the past quarter.

Services offset drop in Mac and iPad sales

If Apple did well with the iPhone, the other products had a complicated quarter. Starting with Macs, whose sales fell 10% to $7.4 billion. iPads, with sales down 2% to $7.2 billion, and wearables, which saw their revenues drop 8% to $8.1 billion, also suffered. On the other hand, the Cupertino company continues to gain momentum in services. The diversification strategy undertaken by Tim Cook has resulted in the creation of a dense offer: Apple TV+, a video streaming service intended to counter Netflix; Apple News+, an online newsstand; Apple Arcade, a video game service… Between April and June, this vertical brought in $19.6 billion, up 12%.

Despite its good performance, Apple will tighten its belt in the coming months to cope with a possible economic slowdown. As part of this, the company plans to revise downwards hiring and spending in certain divisions in 2023, according to Bloomberg. Next year should nevertheless be marked, among other things, by the presentation of a mixed reality headset, which will inaugurate its first major new product category since 2015, and by the launch of the Apple Watch on the connected watch market. . By expanding its product range, the American giant hopes to reduce its dependence on the iPhone, which should nevertheless continue to weigh heavily on its business in the years to come.

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