Apple earnings rise as economic gloom hits tech

Oct 27 (Reuters) – Apple Inc ( AAPL.O ) on Thursday reported revenue and profit that topped Wall Street targets, one of the few bright spots in a technology sector marred by spending cuts due to increase.

The forecast for the rest quarter is worse. Although it did not provide specific figures, Apple said revenue growth would fall below 8% in the December quarter but would not reach Amazon.com AMZN.O, whose strong holiday outlook lowered 14%

Shares of Apple were down in after-hours trading but recovered in positive territory.

The Cupertino, California technology giant was saved by its oldest technology, its computer, while its star, the iPhone, stumbled.

Although iPhone sales weren’t as strong as some analysts expected, they were still a record for the September quarter. Mac sales of $11.5 billion were well ahead of estimates of $9.36 billion.

Apple’s results showed some stability in the face of a weak economy and a strong US dollar that led to bad news from many tech companies. Like Facebook’s parent Meta ( META.O ) and Snap ( SNAP.N ), Apple is seeing a slowdown in ad spending. In general, Apple said that its revenue in the quarter rose 8% to $ 90.1 billion, exceeding the estimate of $ 88.9 billion, and the net profit was $ 1.29 per share, opening the research estimate of $ 1.27 per share, according to Refinitiv data.

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“We did better than we expected, despite the fact that foreign exchange was negative for us,” said Chief Financial Officer Luca Maestri.

The rising US dollar has hit many companies like Apple that spend a lot of money overseas and get less money back when they exchange it. For consumers, it increases the price of new devices when purchased in countries other than the United States.

Apple’s iPhone sales for the fourth quarter of the company’s fiscal year reached $42.6 billion, while Wall Street expected sales of $43.21 billion, according to Refinitiv IBES.

Maestri said iPhone sales set a record for the September quarter, improving 10% over the previous quarter and exceeding the company’s forecast.

“The number of iPhones is an indication of turmoil and uncertainty in the market, but Apple has different ways to remove,” said Runar Bjorhovde, research analyst at market research firm Canalys.

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Sales of Apple’s Mac computers got a boost from the summer launch of the MacBook Air and the redesigned MacBook Pro laptops. A new tablet went on sale this week.

Apple said its share of 43.3% was a record for the September quarter.

Maestri said that strong computer sales also reflected the legal system, which caused a long-term shutdown at one Mac maker, which Apple could fill in the quarter.

The company said that sales of iPads were $7.2 billion, compared to the average estimate of $7.94 billion.

Apple wearables such as AirPods and other devices achieved sales of $9.7 billion, slightly ahead of Wall Street’s forecast of $9.2 billion.

“They said they don’t have major supply issues, so it looks like it’s a thing of the past,” said Carolina Milanesi, Creative Strategies client analyst.

Growth in the company’s services business, which has boosted sales and profits in recent years, saw a rise to $19.2 billion in revenue, below estimates of $20.10 billion.

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Maestri said that Apple got soft in digital advertising and games, as others have in the sector.

“Like other technology companies, even Apple is suffering from the negative effects of a large backlog and continuing supplier problems, even though it has done a better job of navigating a difficult environment,” Jesse Cohen, senior analyst at Investing.com.

In China, which has suffered a severe economic downturn, Apple reported fourth-quarter sales of $15.5 billion. That’s up from the previous quarter, when Apple had $14.6 billion in sales.

Apple said it has 900 million paying subscribers to its service now, up from 860 million previously.

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Reporting by Dawn Chmielewski in Los Angeles and Nivedita Balu in Bengaluru; Editing by Peter Henderson and Lisa Shumaker

Our principles: Thomson Reuters Trust Principles.

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