Apple Slips Past Wall Street Estimates For Fiscal Q3, But Inflation And Residual Pandemic Issues Hamper Results – Deadline

Apple edged Wall Street estimates for its fiscal third quarter, but its results revealed the negative impact of supply shortages and shutdowns in China and other challenges as the tech giant navigates the post-pandemic landscape.

Revenue inched up 2% from a year ago to $83 billion, while earnings per diluted share were at $1.20, down from $1.30 in the comparable period in 2021. Wall Street analysts had been expecting earnings of $1.16 and revenue of $82.8 billion.

Shares in Apple ticked up 3% in after-hours trading after the results. Executives are expected to offer guidance for the all-important fourth-quarter during their conference call with analysts. Investors will be watching for signs of a slowdown, given the company’s boom throughout much of 2020 and 2021, which came despite a host of logistical challenges and retail shutdowns.

Sales of the company’s signature iPhones totaled $40.7 billion, up 3% from a year earlier.

The company’s services division also saw a slowdown, with the company reporting an increase to 860 million subscribers to either software or services like iCloud or Apple Music, up from 825 million in the previous quarter. Services revenue grew 12% to $19.6 billion, just below analysts’ expectation for $19.7 billion. The rate of growth was almost one-third as that of the year-ago quarter.

Apple had already been warning investors of a possible hit of $4 billion to $6 billion to the quarterly results. Sales of Macs and iPads in regions clustered around China — which has pursued a “zero-Covid” policy with frequent and severe lockdowns — were expected to be the line items to show the most weakness. CFO Luca Maestri said in the company’s earnings release that the quarterly results “continued to demonstrate our ability to manage our business effectively despite the challenging operating environment.”

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