5/4/2023: Apple Reports Better than Expected Earnings
Apple reports quarterly earnings ending 3/31/2023 after market close today. Revenue was $94.84B vs. $92.96 expected. EPS was $1.52 vs. $1.43 expected. Gross margin was 44.3% vs. 44.1% expected. Service revenue was $20.91B vs. $20.97 expected.
Product wise, iPhone revenue was$51.33B vs. $48.84B expected. Mac revenue was $7.17B vs. $7.8B expected. iPad revenue was $6.67B vs. $6.69B expected. Other revenue was $8.76B vs. $8.43B expected. It appears that Apple beat earnings primarily because of the strong iPhone sales. But on a year-over-year basis, Apple’s product revenue is down across the board except for iPhone, which has a small 1% sales growth YoY.
In Apple’s press release, the CFO made the following statement:
Our year-over-year business performance improved compared to the December quarter, and we generated strong operating cash flow of $28.6 billion while returning over $23 billion to shareholders during the quarter.
I wonder how much of the stronger iPhone sales is due to China's reopening, both from the supply chain and the demand perspective and if the strong sales trend could continue through the year. AFAIK, ~20% of Apple’s sales is from Greater China and less than half of Apple’s revenue is from America. Apple is a truly global company and its business performance reflects the sentiment of the global affluent consumers. It appears that Apple’s business slowed down on a year-over-year basis but is getting better compared to the previous quarter.