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May 24, 2022
CNBC Business

Apple revenue pops 11% to $123.9 billion despite supply chain concerns

Apple revenue pops 11% to $123.9 billion despite supply chain concerns
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Tim Cook participates in a panel discussion in New York City.

Brian Ach | Getty Images

Apple reported its largest single quarter in terms of revenue ever, with sales growing over 11% despite supply challenges and the lingering effects of the pandemic.

Apple beat analyst estimates for sales in every product category except iPads. Profit was also higher than expectations.

Here is how Apple did in its first fiscal quarter versus Refinitiv consensus estimates:

  • EPS: $2.10 vs. $1.89 estimated, up 25% year-over-year
  • Revenue: $123.9 billion vs. $118.66 billion estimated, up 11% year-over-year
  • iPhone revenue: $71.63 billion vs. $68.34 billion estimated, up 9% year-over-year
  • Services revenue: $19.52 billion vs. $18.61 billion estimated, up 24% year-over-year
  • Other Products revenue: $14.70 billion vs. $14.59 billion estimated, up 13% year-over-year
  • Mac revenue: $10.85 billion vs. $9.52 billion estimated, up 25% year-over-year
  • iPad revenue: $7.25 billion vs. $8.18 billion estimated, down 14% year-over-year
  • Gross margin: 43.8% vs. 41.7% estimated

Apple again did not provide official guidance about expectations for the current quarter. Apple hasn’t provided guidance since the start of the Covid-19 pandemic, citing uncertainty.

It was another strong showing for Apple in its most important quarter of the year which includes holiday sales. Every one of Apple’s product lines grew year-over-year from last year, except for iPad sales, despite management warnings from October that supply issues could hurt the company’s sales.

Apple released new iPhone models in September, and this quarter was the first full quarter of iPhone 13 sales, giving investors a preview of how competitive the devices are in the market. Sales were up 9% annually to $71.63 billion, although they are growing slower than Apple’s overall business.

Services, which include iCloud, Apple Music, search licensing and App Store fees, continued growing strongly, rising 25% annually to $19.52 billion. Services is Apple’s most profitable business unit and its rise contributed to Apple’s higher-than-expected gross margin.

Apple’s other products category, which includes Apple Watch and AirPods, was up 13% year-over-year. This quarter included sales from Apple’s latest Series 7 watch, which has a larger screen, and new AirPods.

Macs had the strongest growth of any of Apple’s hardware lines, growing 25% over last year to $10.85 billion. In October, Apple launched new MacBook Pro models starting at $1,999 that were well-received and featured a new Apple chip instead of an Intel chip.

IPads were the most notable disappointment. Sales shrunk from last year, and missed analyst estimates, but it was likely because Apple could not make enough iPads and prioritized other devices. Apple warned in October that it expected iPad sales to decline because of supply constraints.

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