Apple (AAPL) earnings report for Q3 2022 exceeds expectation

Apple stock (#AAPL) ranked among the top-performing stocks in the first and second quarters of 2022. Investors’ confidence was boosted to anticipate an accelerated performance for the next quarter following the optimistic reports presented last week’s Thursday by the Chief executive officer – Tim Cook, about the remarkable progress made during the third quarter.

Cook noted despite the unanticipated supply constraints experienced by the company during its fiscal third quarter, the company managed to surmount obstacles and close the third quarter on a stronger note.

Cook reported substantial progress for the company during the third quarter, far exceeding Wall Street expectations. The only slowdown in growth was seen in the category of the iPhone maker. According to the data, the company’s revenue rose to $83 billion against the previous record of $82.81 billion, marking a 2% YoY.

The revenue from iPhone sales rose to $40.67 billion against the $38.33 billion estimate recorded last year, marking a 3% YoY. The services revenue rose to $19.60, marking a 12% increase compared to the previous year.

However, some decline was recorded in the following areas: Mac’s revenue fell to $7.38 billion against the previous record of $8.7 billion, marking a 10% decrease YoY. The CEO believes low sales volume was caused by the constraints on supply and the strong dollar seen during the third quarter.

Sales of the iPad fell to $7.22B marking a 2% decline from the previous sales recorded last year. 

Other products such as headphones, AirPods, Apple Watches, and HomePod speakers fell by an estimated 8% YoY.

Nevertheless, the gross margin of sales made was 43.26% marking a 1.2% increase from the previous record of 42.61% YoY.

The Apple services business was the fastest growing segment for Apple during the third quarter. This includes the monthly subscriptions, search licensing fees from Google, revenue from the iPhone App Store and payment fees, warranties.

Apple services increased by more than 12% during the third quarter, although that could be considered a 17% decline from the growth it recorded in the second quarter; however, the progress remains laudable.

Cook said Apple has 860 million current paid subscriptions, including anyone who subscribes to an app sold on the Apple App Store and products such as Apple Music and iCloud.

Cook remarked that they expect the company to grow further in the next quarter of the year. In his words: 

 “In terms of an outlook in the aggregate, we expect revenue to accelerate in the September quarter despite seeing some pockets of softness,”  

While making its forecast for the fourth quarter, the company’s Chief Financial Officer Luca Maestri noted that its revenue is expected to “accelerate” year-over-year. According to him: 

 “Apple (AAPL) expects its gross profit margins for the quarter to be between 41.5% and 42.5%.” 

He further assured investors that the Apple stock company remains strong and determined to move to greater heights in the present quarter.

Maestri reported that Apple had declared a quarterly dividend of $0.23 a share that will be payable to all shareholders of record as of 8th August. This will be paid out three days after on 11th August precisely.

Above all, speaking on the rising inflation and fears of a possible recession, the CEO reported that the company is affected by the inflation menace but will continue to invest. In his words: 

“We do see inflation in our cost structure…We see it in logistics, wages, and certain silicon components, and we’re still hiring, but we’re doing it deliberately.”  

Apple (#AAPL) stock closed the week Bullish with prices at $162.49 per stock. Investors are eager for more gains from this stock in the new month.

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