Apple earnings: iPhone maker is weathering the economic downturn better than fellow tech giants

New York
CNN Business
 — 

Apple beat Wall Street analysts’ sales and income expectations for the quarter ended in September, despite an otherwise bruising earnings season for tech companies and worries that demand for the newest iPhones might have been weaker-than-expected.

The tech giant posted sales of just over $90 billion during its fiscal fourth quarter, up 8% from the same period in the prior year. Profits reached $20.7 billion, a gain of just under 1% from the year-ago quarter.

“Our record September quarter results continue to demonstrate our ability to execute effectively in spite of a challenging and volatile macroeconomic backdrop,” Apple CFO Luca Maestri said in a statement.

Apple

(AAPL) shares dipped just over 1% in after-hours trading Thursday following the report.

Sales from Apple’s products segment grew 9% year-over-year to nearly $71 billion, a decline in growth rate from the prior year but one that was not unexpected. As consumers grapple with high inflation and fears of a possible recession — and, outside the United States, an unusually strong dollar — there had been questions about how successful Apple would be at convincing users to shell out for a device upgrade.

During a call with analysts following the report, CEO Tim Cook said that the company hit a September quarter revenue record for iPhone.

The company’s services segment, which includes paid subscriptions to products like Apple TV+ and Apple Music, posted $19.2 billion in sales, up nearly 5% from the year-ago quarter, marking a decline in growth rate from the prior year. The services segment is viewed as an increasingly important unit for the company, designed to offset slowing growth in parts of its hardware business. Apple now has more than 900 million paid subscriptions across its services, up 155 million from a year ago, Maestri said.

Apple earlier this week raised the prices for its music and TV streaming services, which could help boost sales going forward.

“Like other major tech companies, even Apple is suffering from the negative impact of a worsening macro backdrop and ongoing supply chain woes, though it has done a better job of navigating through the challenging environment,” Investing.com analyst Jesse Cohen said in a statement.

Apple declined to provide revenue guidance for the all-important holiday quarter. However, Maestri said it expects year-over-year revenue growth to decelerate in the December quarter compared to the September quarter, citing the strength of the US dollar and ongoing macroeconomic weakness.