Apple supported by still strong demand for its iPhones

Apple’s net profit fell 11% in the third quarter to $19.4 billion. But it is still better than expected by analysts.

Apple reported stronger-than-expected results on Thursday, with demand for its iPhones remaining robust despite economic fears and logistical challenges ultimately being less than feared.

The computer giant has certainly seen its net profit fall by 11%, to 19.4 billion dollars. But the latter came out above analysts’ expectations, as did turnover (83 billion, up 2%).

The title of Apple rose in stride by more than 3% in electronic trading on Wall Street.

iPhone sales hold up

The company sold $40.7 billion worth of smartphones in the third quarter of its lagged fiscal year (April to June), which is slightly more than the same period last year.

Some analysts feared that the ambient economic slowdown would affect demand for Apple brand products, which are generally quite expensive.

But the effects were “contrasting,” Apple boss Tim Cook said on a conference call.

On iPhone sales, there was no “clear evidence” of an impact from the economic difficulties. On Mac and iPad computers, production was too slowed down by logistical constraints for the group to be able to “test demand”. In contrast, advertising revenue was “clearly affected”, he said.

Disruptions “less significant than expected”

Apple’s services business, which notably includes the App Store and iCloud, as a whole maintained solid growth (12%).

Sales of Mac computers fell by 10%, as did those of iPad tablets (-2%) and connected objects and clothing (-8%).

The group had warned in April that the disruption caused by the resurgence of Covid-19 cases in China and the shortage of silicone necessary for the manufacture of chips could deprive it of 4 to 8 billion dollars in turnover.

Finally, the disturbances “were less important than expected”, indicated Tim Cook.

Revenue growth, also impacted by currency effects and the suspension of sales in Russia, still slowed to its lowest pace since the quarter ended in September 2020.

By geography, Apple saw its revenue grow in North America and Europe but decline in Greater China (which includes Hong Kong and Taiwan) and Japan.

For the current quarter, the group expects its turnover to regain momentum, despite a negative impact of exchange rate effects of around 6%, said the financial director, Luca Maestri, during the conference call.

The logistical constraints on the production of smartphones, computers and tablets should be less significant than in the previous quarter. Demand for the group’s services, on the other hand, should slow down a little “due to macroeconomic factors and exchange rate effects”, underlined the manager.

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