Apple reported sales and profits that beat Wall Street expectations despite a decline in iPhone sales, but buoyed by sales of its smartphone in China that helped the company weather a global decline in the handset market. Overall, the group was able to counter the weakening in revenue thanks to record revenues in the increasingly important services segment, which groups together subscription businesses, from Apple TV+ to the cloud and Apple Music.
Apple said sales for its fiscal third quarter ended July 1 fell 1.4% to $81.8 billion, the third consecutive decline in revenue, and earnings per share rose 5%. to $1.26, with net profits rising 2% to $19.88 billion. The performance beat analyst expectations by $81.69 billion or $1.19 per share, according to IBES data from Refinitiv. iPhone sales slightly missed analyst estimates. However, the services segment grew 8% year over year, more than the 6.1% expected, to $21.21 billion. The number of subscriptions has exceeded one billion. On the other hand, declines worse than forecasts not only for the iPhone (-2% to 39.67 billion) but also for the Mac (-7% to 6.84 billion) and iPad (-20% to 5.79 billion).
Apple said iPhone sales were $39.67 billion, below analyst expectations of $39.91 billion, according to data from Refinitiv. Cook said the iPhone installed base hit a new high but didn’t provide numbers.
The financial director Luca Maestri also anticipated that the turnover could further decrease in the current quarter. The stock was down 2% in the post-market though it remains up 52% since January.
However, Apple does not hold back its bets: new products are on the way, especially in augmented and virtual reality. Apple’s research and development spending hit $22.61 billion for the fiscal year, up about $3.12 billion from a year earlier. In the meantime, new products are on the way, particularly in augmented and virtual reality.