Apple says it is facing ‘significant’ headwinds from strong US dollar
The cautious outlook came as Apple reported $90.1bn in revenues during the September quarter, an 8 per cent increase year-on-year. That beat forecasts of $88.9bn and compared with $83.4bn a year ago, according to Refinitiv. Apple eked out a slight rise in net income to $20.7bn, versus estimates for $20.5bn, in a quarter that has otherwise been bruising to Big Tech’s profits. By contrast, Amazon’s net income fell 9 per cent, Microsoft’s dipped 14 per cent, Alphabet’s declined 27 per cent and Meta’s slumped 52 per cent.
Earnings per share increased 4 per cent to $1.29, higher than expected, despite nearly 6 percentage points of currency headwinds from the strong dollar and concerns consumer demand could falter during a slowing economy. Revenue in its services division, which includes App Store purchases and is Apple’s biggest driver of growth in recent years, fell short of forecasts, rising just 5 per cent to $19.2bn. Analysts expected more than $20bn.
Maestri flagged a “nearly 10 percentage point” headwind, or roughly $12bn, by current revenue estimates, from the foreign exchange effects of the dollar.
He said the company expected revenue from its Mac computers to “decline substantially year-over-year” in the current quarter, after surging 25 per cent last quarter to $11.5bn.
“The strong dollar is so strong that it will hurt Apple’s next quarter by as much as what Nike records in an entire quarter of sales,” said Neil Campling, an analyst at Mirabaud.
iPhone sales, which accounted for 47 per cent of all revenues last quarter, rose 10 per cent to $42.6bn, falling short of estimates for $43.2bn. Analysts have been watching closely to see how the new iPhone 14 line-up has fared ahead of the important holiday quarter.
(US.AAPL)