Apple beat Wall Street expectations for its reported first-quarter financial results, thanks to the strongest-ever sales in its services unit that includes iCloud, the App Store and credit card companies, although more expensive lending weighed on its net result.
Highlights
- apple It achieved revenue of $94.8 billion (86.3 billion euros) and adjusted earnings per share of $1.52 (1.38 euros) for the three-month period ended in April, far exceeding analyst estimates of $92.9 billion (84.6 billion euros) and $1.43 (1.30 euros), respectively. According to FactSet.
- It was the company’s best-ever quarter for the services business and the best spring quarter for iPhone sales, billionaire Apple CEO Tim Cook said in a statement accompanying the release, generating $20.9 billion (€19 billion) in service revenue and $51.3 billion (€46.7 billion). billion euros) in iPhone sales.
- The tech giant reported a 20% drop in iPhone revenue from the previous quarter, but an increase of 2% year-over-year, although the decline was less than what analysts expected for the quarter following the release of the iPhone 14.
- Higher costs affected Apple’s profits. The company reported $1.9 billion (€1.7 billion) in interest payments over the past six months, up more than 30% compared to the same period last year, as the Federal Reserve continues to raise interest rates.
- the event from Apple It was up 2% in after-session trading.
main context
After surging more than 300% between March 2020 and a late 2021 peak, Apple shares fell again in 2022, losing 27%, reflecting a broader decline in technology stocks that are seen as more sensitive to a higher interest rate environment. Although the company fell short of revenue and earnings expectations in its February earnings report, shares of Apple are up 32% since the start of the month. With a market capitalization of $2,650 billion (€2,413 billion), Apple remains by far the most profitable company in the world.
A large number
About 555 billion dollars (505 billion euros). That’s the amount of market capitalization Apple has gained year-to-date, more than the combined market capitalization of Tesla and LVMH, the world’s ninth and tenth largest companies.
Amazing fact
Last month, Apple stepped up its foray into the financial space by unveiling a high-yield savings account through Goldman Sachs, offering a 4.15% yield to customers. On April 17, the date of its launch, the account saw nearly $400m (€364m) in deposits and up to $990m (€900m) in its first four days of existence, Forbes sources reported.
to monitor
In a Monday note to clients, Bank of America analysts Wamsi Mohan and Ruplu Bhattacharya said their main question about Apple stock is whether “the threat of Bing gives Apple an advantage in negotiations with Google” as part of the iPhone’s default search engine contract, which it deserves. 3 billion dollars (2.7 billion euros) annually. Alphabet, the parent company of Google, and Microsoft, the OpenAI investor, are locked in a conflict over artificial intelligence, as Microsoft seeks to use artificial intelligence to boost the Bing search engine.
the shadow
Apple’s results come at the end of a fairly good earnings season. About 70% of S&P 500 companies beat analyst estimates for earnings and sales, above the average seen last year, according to a JPMorgan strategist led by Dubravko Lacos-Pojas. Alphabet, Meta, and Microsoft all beat earnings and sales forecasts in their respective reports last week.
Translated article from the American magazine Forbes – Author: Derek Saul
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