Despite supply-chain problems fuelled by the pandemic and chip shortages, Apple Inc. rallied in late trading after quarterly revenue surpassed Wall Street expectations.
The company said its fiscal first-quarter sales rose 11% to a record $124 billion. Analysts expected $119.1 billion.
Profits also exceeded forecasts in the March quarter, and the company predicted double-digit percentage sales growth.
In light of the surprising results, supply upheaval fears may have been exaggerated. Last year, Tim Cook, Apple’s CEO, warned that shortfalls during the holiday season could cost the company more than $6 billion in sales.
But the tech giant managed to weather the crisis and released a flurry of new products, including the iPhone 13, Apple Watch Series 7 and updated Macs.
During extended trading, the shares rose 5.8% to $168.38. Prior to the report, they had fallen 10% this year due to a general downturn. During 2021, it gained 34%.
After the recent rout battered technology stocks, investors are looking to Apple for reassurance. Apple itself has been affected by a retreat in the past month due to worries about a sales slowdown and looming interest rate hikes.
Apple now has a market value of $2.6 trillion after topping a market cap of $3 trillion at the beginning of January.
Analysts expected earnings of $1.90 a share from Cupertino, California-based company in the first quarter that ended Dec. 25. However, earnings rose to $2.10, well above the $1.90 analyst estimate.
The company’s executives said on a conference call that supply-chain constraints would ease further in the March quarter, but that rates of growth would decline for both the overall business and the services segment.
Apple also reported that 1.8 billion Apple devices were in use as of two years ago, up 300 million from two years ago. Moreover, it now has 785 million subscriptions on its platform for Apple and third-parties, up from 745 million in the last quarter.
From its flagship product, the iPhone, the company generated $71.6 billion in revenue, exceeding Wall Street’s expectations of $66.7 billion. That represents a 9.2% increase from the year-ago quarter.
A question on the call asked Tim Cook, leader of Apple, about the so-called metaverse, a concept promoted by Facebook owner Meta Platforms Inc. and others. Despite Apple’s heavy investment in augmented reality, Cook noted that AR apps are already available on the iPhone.
