Apple posts record quarterly results on new products and services

Cupertino-based company earned a net profit of more than $34.6bn in the October-December period

People scan health QR codes before entering an Apple store in Beijing. The company's first-quarter revenue rose 11.2 per cent a year to more than $123.9 billion. AFP

Apple posted record quarterly sales and net profit in the first three months of its 2022 financial year despite supply chain challenges.

Net profit increased more than 20 per cent to about $35 billion from the same period in the previous year. It was up by about 68 per cent from the preceding quarter.

Revenue rose 11.2 per cent a year to more than $123.9bn during the quarter that ended on December 25, exceeding analysts’ estimates of $118.6bn.

The results were made possible by the company’s “most innovative” line-up of products and services, Apple’s chief executive Tim Cook said.

“We are gratified to see the response from customers around the world at a time when staying connected has never been more important.

“We are doing all we can to help build a better world … making progress towards our goal of becoming carbon neutral across our supply chain and products by 2030, and pushing forward with our work in education and racial equity and justice,” Mr Cook said.

Apple's stock price rose more than 4 per cent to $159.2 a share in after-hours trading.

Apple's sales across all product categories reported double-digit growth in the last quarter.

The technology company's iPhone sales accounted for about 57.7 per cent of the company's total revenue in the holiday quarter despite supply chain disruptions.

Smartphone sales surged by about 9.1 per cent to more than $71.6bn in the quarter, compared with the same period in 2020, as they surpassed analysts' estimates of $68.3bn.

The company’s total revenue from services grew about 23.8 per cent annually to $19.5bn while revenue from wearables, home and accessories products increased by about 13.3 per cent a year to more than $14.7bn.

Revenue from iPads and computers jumped more than 5 per cent annually to about $18.1bn.

Mr Cook said coronavirus-induced supply chain disruptions are improving.

“What we expect for the March quarter is solid year-over-year revenue growth … we expect supply constraints in the March quarter to be less than they were in the December quarter,” he told CNBC in an interview.

Mr Cook, who has led one of the world’s most valued technology companies since 2011, earned more than $98.7 million in salary last year, more than six times his 2020 salary of $14.7m, according to a statement the Cupertino-based company filed with the US Securities and Exchange Commission.

Apple’s sales in the Americas accounted for about 41.5 per cent of the company's total first-quarter revenue and it earned $51.5bn in the region – a yearly increase of 11.2 per cent.

It was followed by Europe and the Greater China market (China, Hong Kong and Taiwan), which added $29.7bn and $25.8bn, respectively, to the company’s revenue.

Despite US-China trade issues, Apple managed to gain significant new ground in the Greater China market, which reported an annual increase of about 21 per cent.

Japan and rest of the Asia-Pacific market added more than $16.9bn to Apple’s first-quarter sales, an annual increase of 2.5 per cent.

During the December quarter, Apple returned about $27bn to its shareholders. The company looks to reach a net cash neutral position over time, chief financial officer Luca Maestri said.

“The very strong customer response to our recent launch of new products and services drove double-digit growth in revenue and earnings, and helped set an all-time high for our installed base of active devices,” Mr Maestri said.

Apple’s board of directors has declared a cash dividend of $0.22 per share of the company’s common stock. The dividend is payable on February 10 to shareholders on record at the close of business on February 7 this year, the company said.

In the October-December period, Apple spent more than $6.3bn on research and development, over 5 per cent of its total revenue. It was up by about 22.1 per cent compared to the same period in 2020.

Apple did not issue official guidance about future revenue and profits. The company stopped offering guidance at the start of the Covid-19 pandemic due to uncertainty in business.

The company’s cash, cash equivalents and marketable securities stood at $63.9bn, an annual increase of more than 2 per cent, as of December 25.

In September and October, Apple launched a series of new products, including the iPhone 13 series, Apple Watch 7, new AirPods and new iPads, as well as MacBook Pro laptops powered by the company’s in-house M1 Pro and M1 Max chips.

The new product releases helped the company to draw more customers in the holiday quarter, industry analysts said.