On FXMAG.COM request, Andrey Goilov from RoboForex comments on Apple earnings. The company's revenue hit almost $95bn with iPhone sales increasing 4%. Here's what Andrey said about Apple 1Q23 earnings:
Apple Inc. (NASDAQ: AAPL) delivered mixed financial results for the first quarter of 2023 ended on 1 April. The company recorded revenue of 94.8 billion USD, which is 3% lower than the same period last year, and net income of 24.16 billion USD (1.52 USD per share), down 3.4% compared with the previous year. However, these figures beat the expectations of experts who had forecast revenue of 92.96 billion USD and EPS of 1.43 USD.
The company is also successfully developing its services business, which ensures a stable flow of income from subscriptions to various applications and platforms. This segment's revenue reached an all-time record of 20.9 billion USD.
Meanwhile, Mac revenue saw the biggest decline, shrinking from 10.4 billion to 7.2 billion USD. There are several reasons for this. First, the company faced difficulties, struggling to compare with last year, when Mac was in strong demand due to the pandemic and a shift to remote work and learning. Secondly, the company faced macroeconomic issues such as shortages in components, rising shipping costs, and low demand in some regions. Third, the company was transitioning to Apple Silicon processors, which may have discouraged prospective customers who were awaiting the Mac line-up upgrade. Sales of iPad and other wearable devices and accessories also dropped by 13% and 0.6% respectively.
Revenue also varied by region, with sales in the US falling from 40.89 to 37.8 billion USD, in China from 18.3 to 17.8 billion USD, and in Japan from 7.7 to 7.2 billion USD. Nevertheless, sales in Europe increased from 23.23 to 23.9 billion USD and from 7.0 to 8.1 billion USD in the rest of the world.
In this context, Apple's plans for a dividend increase and stock buyback programme came as a surprise. The company's board of directors approved another 90 billion USD stock buyback and announced an increase in DPS from 0.23 to 0.24 USD. Dividends will be paid on 18 May.
Apple's CEO Timothy Cook expressed satisfaction with the results and noted that its active device base had increased to an all-time high. Apple's Chief Financial Officer Luca Maestri said the company's business performance improved compared to the December quarter and the operating cash flow of 28.6 billion USD was strong.
iPhone sales were the main driver of Apple's higher-than-expected income and profit, despite the challenging macroeconomic environment. Apple's services division also achieved record performance and demonstrated the strength of its ecosystem and customer loyalty.
However, Apple's total sales volume and net profit declined for the second straight quarter, which indicates that the company is still facing challenges due to supply chain issues and lower demand for other products such as the Mac and iPad.
Apple did not give an outlook for the next quarter, which could prove even more challenging due to parts shortages and competition. Overall, the company's report can be considered good, but not without concerns about a deterioration in future performance.
