Apple reports flat net profit despite record revenue for quarter

Company’s net profit in period ending September 24 surged to more than $20.7bn

Apple's fourth-quarter revenue rose 8 per cent year on year to $90.1 billion. Reuters
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Apple reported a flat 2022 fiscal year fourth-quarter net profit despite record revenue in the July-September period.

The company’s net profit in the period ending on September 24 surged to more than $20.7 billion, only $170 million more than the same period the year before.

That is about $1.3bn, or 6.7 per cent, more than the quarter that ended on June 25 this year.

Revenue rose 8 per cent year on year to $90.1bn during the quarter, passing analyst estimates of $88.9bn compiled by Refinitiv.

“This quarter’s results reflect Apple’s commitment to our customers, to the pursuit of innovation and to leaving the world better than we found it,” Apple’s chief executive Tim Cook said.

Last week, Apple launched a completely redesigned iPad and upgraded iPad Pro as part of its new-look tablet line-up to attract new customers.

The new product line reflects Apple's aim of allowing the devices to support productive activities such as producing high-resolution videos and school projects, while also being strong enough to play a graphics-heavy video game.

The company also unveiled the iPhone 14 series, Apple Watch 8 Series and new AirPods last month.

“As we head into the holiday season with our most powerful line-up ever, we are leading with our values in every action we take and every decision we make,” Mr Cook said.

“We are deeply committed to protecting the environment, to securing user privacy, to strengthening accessibility and to creating products and services that can unlock humanity’s full creative potential."

The company’s full financial year’s net profit increased 5.4 per cent to $99.8bn. Its 12-month sales were more than $394.3bn, up more than 7.7 per cent on a yearly basis.

The company’s diluted earnings per share surged nearly 0.4 per cent year on year to $1.29, exceeding the estimates of $1.27.

The company’s stock, which has dropped more than 20.4 per cent since the start of the year, was trading almost 0.70 per cent up at $144.80 a share in after-market hours.

Apple's sales across all product categories surged in the last quarter.

This quarter’s results reflect Apple’s commitment to our customers, to the pursuit of innovation and to leaving the world better than we found it
Apple’s chief executive Tim Cook

iPhone sales account for about 47.3 per cent of the company's revenue.

Smartphone sales increased nearly 9.7 per cent to more than $42.6bn in the quarter from the same period in 2021, missing analyst estimates of $43.2bn.

The company’s total revenue from its services division grew about 5 per cent annually to $19.2bn, while revenue from wearables, home and accessories products increased almost 9.8 per cent yearly to more than $9.6bn.

Revenue from iPads and computers increased 7.1 per cent to nearly $18.7bn.

Apple’s sales in the Americas region accounted for more than 44.1 per cent of the company's total fourth-quarter revenue, with over $39.8bn.

It was followed by Europe and the Greater China market (China, Hong Kong and Taiwan), which added $22.8bn and $15.5bn to the company’s revenue, respectively.

Japan and rest of the Asia Pacific market added more than $12bn to Apple’s fourth-quarter sales, an annual jump of 7.9 per cent.

Apple generated more than $24 bn of operating cash flow and returned more than $29bn to its shareholders during the quarter.

“Our record September quarter results continue to demonstrate our ability to execute effectively in spite of a challenging and volatile macroeconomic backdrop,” Apple’s chief financial officer Luca Maestri said.

“We continued to invest in our long-term growth plans … the strength of our ecosystem, unmatched customer loyalty and record sales spurred our active installed base of devices to a new all-time high."

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

Apple said its board of directors had declared a cash dividend, payable on November 10, of $0.23 for each share of the company’s common stock.

The company expects a bumper sale in the holiday quarter that will also include its latest line-up of products.

“The foreign exchange headwinds were over 600 basis points for the quarter,” Mr Cook told CNBC. “So it was significant. We would have grown in double digits without the foreign exchange headwinds."

Updated: October 28, 2022, 6:17 AM