Apple released its third quarter earnings report, showing revenue of $83 billion, beating analyst’s expectations of $82.7 billion, despite fears that a slowing economy and rising inflation might have eroded consumer sentiment.
The good news for the tech behemoth did not stop there. Earnings per share came in at $1.20 versus a $1.16 estimate. iPhone revenues was $40.7 billion, while the estimate had been $38.9 billion. iPad revenue was $7.22 billion versus an estimate of $6.9 billion. Mac revenue came in at $7.4 billion versus an $8.8 billion estimate. And services revenue was $19.6 billion versus a $19.7 estimate.
Apple stock jumped 3% after the report came out.
In a statement, Apple CFO Luca Maestri said, “Our June quarter results continued to demonstrate our ability to manage our business effectively despite the challenging operating environment. We set a June quarter revenue record and our installed base of active devices reached an all-time high in every geographic segment and product category.”
Unfortunately, despite record revenues, the tech giant’s net income dropped 10.5% year over year, and the company’s market capitalization fell below $3 trillion, to $2.5 trillion.
Rising inflation and Covid-19 lockdowns in China crushed sales and production in the that market.
According to Morgan Stanley however, the few down numbers in the report are merely short term issues for the perennial innovator. Erik W. Woodring noted Apple’s service business could easily drive market capitalization right back over $3 trillion again. In the third quarter services had proven incredibly strong, as last year’s $17.5 billion rose to $19.6 billion.
And that ignores Apple’s product pipeline. It is widely expected that later this fall, Apple will launch its iPhone 14 line, as well as the Apple Watch Series 8. Though they will be launched too late to add to the fourth quarter’s earnings, they should energize the first quarter of 2023.
In addition, Apple is believed to be set to launch its own augmented-reality/virtual-reality headset later in 2023. That will be an entirely new line of products, and it will develop its own line of services and content to sell.
