Apple’s profit drops nearly 11%

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New York
CNN Business

Even the world’s most valuable tech company isn’t immune to the tougher global economic climate.

Apple (AAPL) reported on Thursday that its profits fell nearly 11% in the three months to June compared to the same period a year ago, as the company weathered an economic downturn and disruptions to supply chain in China due to the country’s zero-Covid policy. .

The iPhone giant posted revenue of $83 billion, up 2% from the same period a year earlier. While this was the company’s highest revenue in its third fiscal quarter, it marked a significant slowdown in growth from its 36% year-over-year increase. the other from income the previous year.

Sales in Greater China, once one of the company’s most promising regions, fell about 1% in the quarter.

Still, Apple beat Wall Street expectations for sales and earnings. Apple shares rose nearly 4% in after-hours trading on Thursday after the results.

The company says its installed base of active devices reached all-time highs in every product category during the quarter. Quarterly sales of Apple’s services, a crucial part of the company’s future growth strategy, rose 12% to $19.6 billion, slightly below the $19.7 billion expected by marketers. analysts.

The company now has more than 860 million paid subscriptions to its various services, an increase of 160 million since last year, Apple’s chief financial officer Luca Maestri said in a conference call with analysts. Thursday.

“Our June quarter results continued to demonstrate our ability to effectively manage our business despite the challenging operating environment,” Maestri said in a statement containing the results.

Apple’s results come as a number of tech companies have struggled to sustain strong growth amid rising inflation and interest rates, fears of a looming recession and fallout of the ongoing war in Ukraine.

The company declined to share its revenue forecast for the current quarter due to economic uncertainty. However, Maestri said Apple expects year-over-year revenue growth to accelerate in the September quarter compared to the June quarter, assuming the macroeconomic situation and the Covid-related impacts on its business are not worsening. He added that supply constraints are also expected to be lower than they were in the June quarter.

Maestri also noted the company’s efforts to make it easier for customers to purchase its products, including the expansion of installment payment and redemption programs worldwide.

In response to the economic uncertainty, CEO Tim Cook said Apple itself plans to “continue to hire people and invest in certain areas” but will be “more deliberate” in doing so.

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