iPhone maker, Apple (AAPL), reported results for the second quarter of fiscal year 2022, which saw tremendous growth compared to the same quarter last year and breached consensus estimates.
In addition to iPhone smartphones, Apple also produces personal computers under the Mac brand and tablets under the iPad brand. It also offers a variety of digital services under brands such as Apple Music for music streaming and Apple Pay for mobile payments.
Despite the impressive results, investors appeared more worried about the future. On April 28, AAPL stock dropped during extended trading after management warned of a potentially large revenue loss in the next quarter.
Q2 Earnings at a Glance
Revenue rose 9% year-over-year to $97.3 billion and exceeded consensus estimates of $93.89 billion. Sales at Apple’s core businesses soared, resulting in record iPhone, Mac and services revenue growth. Earnings of $1.52 per share rose from $1.40 per share from the same quarter last year and beat the consensus estimate of $1.43 per share.
“This quarter’s record results are a testament to Apple’s relentless focus on innovation and our ability to create the best products and services in the world,” said Apple CEO Tim Cook.
Promote dividend and share repurchase program
Apple plans to distribute a quarterly dividend of $0.23 per share on May 12, representing a 5% increase from the previous payment. The company has also added $90 billion to its share buyback plan.
June Quarterly Outlook
Apple is facing supply chain challenges, stemming from issues such as COVID-19 disruption, chip shortages and the war in Ukraine. In China, the resurgence of COVID-19 has led to lockdowns in places like Shanghai, home to many Apple suppliers.
These challenges are affecting a company’s ability to meet customer demand for its products. As a result, Apple expects these headwinds to hurt its June quarter revenue of between $4 billion and $8 billion.
Wall Street’s Tech
On April 27, Evercore ISI analyst Amit Daryani reiterated a buy rating on Apple stock with a price target of $210, indicating a 28.3% upside potential.
The consensus among analysts is a strong buy based on 18 buys and four holds. The average Apple price forecast of $194.22 implies an increase of 18.7% over current levels. The shares have gained 23.3% in the past one year.
During the March quarter, Apple’s website traffic tool reported a year-over-year increase of 492.8% in total visits. An upward website traffic trend may indicate increased interest in a company’s products, which in turn can provide a clue into the company’s performance. In Apple’s case, traffic growth correctly predicted the company’s strong March quarter earnings results.
Learn more about the website traffic tool in this video by Youtube sensation Tom Nash.
Important takeaways for investors
Apple’s warning of revenue loss in the June quarter is tentative and shouldn’t affect the bigger picture, which is the company’s ability to continue growing in the coming years. one in CNBC In interviews following the March quarter report, Tim Cook said the iPhone business is benefiting not only from existing customers upgrading their devices, but also benefiting from those switching from rival products such as Android phones.
The iPhone provides an important platform on which Apple can sell its various services. Therefore, expanding iPhone adoption implies a bright future for the company’s other businesses. Finally, Apple has the expertise and financial resources to adjust quickly to challenges, and it can do the same to mitigate the blow from current supply chain constraints.
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