By Paresh Dave and Nivedita Balu
OAKLAND, California (USA) (Reuters) – Apple projected a difficult scenario on Thursday as Chinese lockdowns hurt production and demand, the war in Ukraine affects sales and growth slows in the services sector. The company’s chief financial officer, Luca Maestri, warned that the war in Ukraine, which caused Apple to stop its sales in Russia, will fall deeper.
He told analysts on a conference call that supply chain issues will hurt this quarter’s sales by $4 billion to $8 billion, substantially greater than the impact in the previous quarter. Apple’s overall tax revenue was $97.3 billion, up 8.6% from last year and higher than the average analyst estimate of $93.89 billion, according to Refinitiv data. Worldwide phone sales revenue was $50.6 billion, up 5.5% year-over-year, and service sales rose 17% to $19.8 billion, both above average analyst forecasts. .
Total earnings were $25 billion, or $1.52 per share, easily beating analysts’ expectations of $23.2 billion and $1.43 per share.
Apple also increased its dividend by 5% to 23 cents a share and the board approved a buyback of an additional $90 billion worth of shares. Investors are bracing for slumps in consumer spending on tech gadgets and services as the war in Ukraine and other factors raise the cost of oil, food and other staples.
Apple said iPad sales fell 2% to $7.65 billion while Mac computer revenue rose 14.7% to $10.4 billion.
Sales of products like headphones and watches rose 12% to $8.8 billion, and it was the only unit to miss Wall Street’s targets. Maestri said the Watch and AirPods sold well and attributed the drop to seasonality in demand for other accessories. Apple said it now has 825 million paying subscribers across its at least seven subscription offerings, up 40 million from 785 million last quarter. The growth comes as rivals like Netflix reported subscriber losses.
(By Paresh Dave and Nivedita Balu)
