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Apple Q3 2022 Report Reveals iPhone Sales Resilience Despite 11% Decline in Profit

Apple Inc (NASDAQ: AAPL) released its fiscal Q3 2022 earnings report on Thursday with figures that exceeded analysts’ expectations on sales and profit. However, the consumer tech giant also revealed slowing growth for its flagship iPhone market, and did not provide formal guidance for fiscal Q4. Notwithstanding, Apple chief executive officer Tim Cook hinted at the company’s outlook for the remaining fiscal quarter of the year, saying:

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

Furthermore, Cook also suggested that there is insufficient evidence proving that macroeconomic parameters are impacting smartphone sales.

Apple Q3 2022 Report by the Numbers

Apple’s fiscal Q3 2022 financial report showed earnings per share (EPS) at $1.20, higher than the estimated $1.16. Although this figure topped the general consensus estimate, it still represents an 8% setback year-over-year (YoY). Meanwhile, for the same fiscal quarter, Apple raked in revenue of $83 billion, surpassing the $82.81 billion estimation. In addition, the tech multinational’s revenue haul for the period is also up 2% YoY.

Apple reported that its profit fell 11% to $19.4 billion, its worst quarter since the July-through-September period in 2020. However, the company also stated that sales of the iPhone remained resilient throughout this period. iPhone revenue came in at $40.67 billion, higher than the estimated $38.33 billion. This figure also represents a 3% increase YoY for the tech devices.

Meanwhile, the sales performance of Apple’s other notable device, the Mac computer, did not fare as impressively. For the fiscal quarter, Apple realized $7.38 billion from Mac sales, lower than the $8.70 billion estimated. Overall, this figure represents a marked 10% YoY decline for the product line.

Apple also reported that iPad revenue surpassed analysts’ expectations at $7.22 billion versus the $6.94 billion estimated. However, iPad revenue is down 2% from the year-ago fiscal quarter.

Other notable takeaways from Apple’s report include services revenue at $19.60 billion compared to $19.70 billion estimated, and up 12% YoY. Also, the company’s revenue from other products was lower than expected at $8.08 billion versus the $8.86 billion estimated. This represents an 8% decline YoY.

What Lies Ahead

Following news of its earnings report, Apple stock rose by more than 3% in extended trading. Furthermore, although the tech giant did not provide formal guidance for the quarter, analysts already have expectations. The current estimate for Apple’s fourth-quarter guidance is $1.31 in earnings per share and approximately $90 billion in sales.

Cook also provided insight into how Apple is weathering inflationary pressure amid rising interest rates. At a time when several businesses are taking drastic measures to remain profitable, he suggested Apple will keep making investments.

“We do see inflation in our cost structure. We see it in things like logistics and wages and certain silicon components and we’re still hiring, but we’re doing it on a deliberate basis,” noted Tim Cook.

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Apple Q3 2022 Report Reveals iPhone Sales Resilience Despite 11% Decline in Profit