Apple Inc. Earnings Report (Q1 2022)

Apple reports a strong set of financial results for the first quarter of 2022, sending its share price higher.
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Apple have just released their financial reports for Q1 2022 ending December 25th, 2021, and beat analyst expectations in all categories, except from iPad.

Net revenue came in at $123.9 billion, which is up from $111.4 billion in Q1 2020, an increase of 11% year on year. Analysts expected a revenue figure of around $118.6 billion.

$71.63 billion of the net revenue figure came from sales of Apple’s flagship product the iPhone, which is up from the $65.59 billion reported in Q1 2020, hence an increase of 9% year on year. Analysts had estimated a number around the $68.34 billion mark.

It is noticeably clear that Apple’s services such as Fitness+, Music and TV+ are seeing accelerated growth. Apple reported revenue generated from services to be $19.5 billion, compared to the $15.7 billion the company reported back in Q1 2020. That represents a growth of 24% year on year, comfortably beating analyst estimates of $18.6 billion.

Revenue from other products (such as Apple Watch and HomePod) came in at $14.7 billion, up from the $12.9 billion Apple had reported a year prior. Therefore, revenue in this area has rose 13% year on year. Analysts had estimated a figure of around $14.59 billion.

However, iPad revenue growth seems to be in the decline. In Q1 2020, Apple had reported iPad revenue to be $8.435 billion, but in this quarter, revenue generated from iPads was $7.24 billion. This is a 14% decline year on year, and this missed analyst expectations of $8.18 billion.

Earnings per share was $2.10, which is significantly higher than the $1.68 it reported back in Q1 2020. That represents a growth of 25% year on year and beat analyst expectations of $1.89 comfortably.

In the report, Apple CEO Tim Cook said:

“This quarter’s record results were made possible by our most innovative lineup of products and services ever,”

“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 toward 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.”

Luca Maestri, Apple’s CFO, 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,”

“These record operating results allowed us to return nearly $27 billion to our shareholders during the quarter, as we maintain our target of reaching a net cash neutral position over time.”

In an interview with CNBC, Tim Cook said that Apple ‘is very proud’ of the 9% increase in iPhone sales, particularly because of the supply chain challenges the company has faced during the pandemic. However, he did hint that these challenges are slowly being overcome, but he acknowledged that chip shortages may have a prolonged impact on the company in the foreseeable future.

Apple’s share price rose 3.5% ($5.88) in extended trading on Thursday, and currently trades at $165.01.

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