Apple’s quarterly profit and sales were at record levels despite the fact that the company was dealing with supply chain issues during the holiday trading period.
Wall Street expectations were exceeded last night when the company revealed that its revenue from China, which is a key driver of growth, has risen by more than a fifth.
The company stated that it was difficult to predict the future of chip shortages, but that they were confident that there would be an improvement in supply over time.
Apple’s total sales increased by 11 percent to $118.7billion in the most profitable quarter of the year. The net profit rose by 20% to $34.6 billion. The group’s shares rose by $5.02 or 3.2 percent to $164.24 in out-of-hours trades.
Apple is based in Cupertino (California) and makes iPhones. These devices typically account for half of its total sales. Apple also sells software via its Apple store and storage space via the iCloud. It also offers music, TV, and subscriptions to fitness services. It is the largest publicly traded company in the world and was briefly the first business to reach $3 trillion. Apple shares have come under increasing pressure due to a wider sell-off in technology stocks.
Tim Cook, the company’s chief executive, stated that “this quarter’s record results were possible because of our most innovative lineup of products and services.” We are delighted to have received such positive feedback from our customers all over the globe at a time where staying connected is more important than ever.
This is the latest update from America’s largest technology companies on shareholders for the third quarter of 2021. Next week will see updates from Amazon, Alphabet (owner of YouTube and Google), and Meta Platforms (owner of Instagram and Facebook),
Apple’s chief financial officer Luca Maestri cited a strong customer response to its recent product launches as well as continued growth in the company’s services division which includes its streaming platforms.
Baird’s senior research analyst Will Power stated that Apple is not yet “fully out the woods”. He said that supply disruptions continue to affect the global economy. Another issue is maintaining sales momentum following a string of strong quarters.
He stated that although supply chain issues appear to have improved since the beginning of the quarter, it will still be an area that investors need to focus on in order to understand exactly where it is. The bigger questions will likely revolve around pulling forward. They were clearly a beneficiary of this pandemic.
Wedbush Capital’s Dan Ives suggested that Apple had managed supply chain issues in “almost Teflon-like manner” during strong demand for its iPhone and its related services.
Rumours continue to swirl about Apple’s plans for new products and a possible entry into the automotive industry. Cook, 61, refused to comment on Apple’s automotive ambitions last autumn, but acknowledged that the company has sought to keep such plans secret for many years.
Bloomberg News reported this week that Apple is planning to launch a service that allows small businesses to make payments using their iPhones.
It has a large cash stash, but few people expect Apple to be the next Microsoft. Apple recently agreed to purchase Activision Blizzard (the video games company) for $68.7billion and will soon announce a major acquisition. They have not made any major acquisitions in the past. . . Power stated that they don’t expect anything to be significant. Investors would be happy to see a diversification of revenue streams and cashflow that they generate.