Apple (AAPL Stock) Share Price Expected to Rise After Another Record Quarter

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As the Nasdaq closed at a 7-month low yesterday, Apple’s stock price also found itself on the tail end of recent weakness in tech stocks, down more than 12% from its early January records.

In its latest round of fourth-quarter numbers, revenue came in below expectations at $83.36 billion, which, while still a strong number, raised questions about the impact of recent supply chain disruptions on its ability to produce enough product to meet demand.

CEO Tim Cook admitted as much in October when he said various supply issues cost Apple $6 billion in the quarter, while in the third quarter they reduced iPhone production. of 10 million units.

In the fourth quarter, Apple said its biggest problem was meeting demand for its products. So there were concerns that last night’s first quarter numbers could suffer from the same issues, given the revenue loss on iPhone sales we saw in the fourth quarter.

That being said, Q1 tends to be Apple’s best quarter heading into Christmas, and it’s also worth remembering that Q4’s slowdown might just have been a symptom of customers holding back to take advantage of the series of new product upgrades that have arrived. Q4 with new iPhones, iPads, Watches, and Macs that won’t ship until late November, early December.

Whatever worries investors might have had before last night’s numbers, they needn’t have worried, as demand that looked so weak in the fourth quarter surged back in the run-up to Thanksgiving and of the Christmas vacation period.

Apple’s first-quarter revenue hit a new record high of $123.95 billion, well above expectations of $119 billion, while profit hit $2.10 billion, or just under $35 billion, with record revenue for iPhone sales, helping to push stocks significantly higher in after-hours and pushing stocks back to record highs this month.

The numbers were dialed as follows, iPhone revenue hit $71.63 billion, above forecast of $67.74 billion, Mac revenue $10.85 billion, apparel , home and accessories, $14.7 billion, iPad revenue of $7.25 billion, service revenue of $19.25 billion, with only iPad revenue in below consensus expectations of $8.1 billion, which is a little disappointing given the launch and updates to the mini and iPad lineup.

Apple Chief Financial Officer Luca Maestri attributed the iPad’s failure to difficulties in finding enough components, as well as allocating components to the more expensive iPhone, suggesting that demand is not wasn’t the issue here and that Apple has prioritized its higher-margin products. like the iPhone.

Operating margins on products reached 38.4%, while margins on services reached a new record high of 72.4%.

Revenue from the services continues to strengthen and with 785 million music streaming and gaming subscribers, Apple CEO Tim Cook has suggested they start looking at developing products for augmented reality and were drawing up plans for an AR headset and glasses next year. or so, as he appears to be moving through the metaverse.

Last night’s numbers were even more impressive given that there were product delays in December, with all geographies except Japan falling short.

Some of these supply disruptions may well ripple through the second quarter, but that shouldn’t negatively impact its ability to move product, with strong demand still present, although second quarter revenue is expected further slow to around $90 billion.

Apple has declined to provide guidance consistent with previous quarters since the pandemic began.

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