ABC News Today

Apple Inc on Thursday reported revenue and profit that beat Wall Street targets, one of the few bright spots in a technology sector hit by inflation-driven spending cuts.

The forecast for the holiday term was grimmer. While it didn’t provide specific numbers, Apple said revenue growth would fall below 8 percent in the December quarter, but it didn’t come as far as Amazon. com, whose dire holiday outlook sent its shares down 14%.

Apple shares were initially lower in after-hours trading, but rebounded into positive territory.

The Cupertino, California-based tech giant survived on its oldest technology, its laptops, while its star, the iPhone, stumbled.

While iPhone sales weren’t as strong as some analysts had predicted, they were still a record for the September quarter. Mac sales of $11.5 billion were far behind analysts’ estimates of $9.36 billion.

Apple’s results showed some resilience in the face of a weak economy and a strong U.S. dollar that has led to disastrous reports from many tech companies. Like Facebook parent Meta and Snap, Apple is seeing softness in ad spending. Overall, Apple said quarterly revenue rose 8% to $90.1 billion, topping estimates of $88.9 billion, and net profit was $1.29 per share, beating the analysts’ average estimate of $1.27 per share, according to data from Refinitiv.

“We did better than we expected, despite the currency change being a significant negative for us,” said chief financial officer Luca Maestri.

The rise of the US dollar has affected many companies like Apple that generate substantial foreign revenue and receive less money when they convert it. For consumers, the price of new devices increases when purchased in countries outside the United States.

Apple’s iPhone sales for the company’s fiscal fourth quarter rose to $42.6 billion, when Wall Street expected sales of $43.21 billion, according to Refinitiv IBES.

Maestri said iPhone sales set a record for the September quarter, improving 10% from the year-ago quarter and beating the company’s forecast.

“The iPhone number is an indication of the turmoil and uncertainty in the market, but Apple has different ways to compensate,” said Runar Bjorhovde, research analyst at market research firm Canalys.

Apple’s Mac sales got a boost from this summer’s introduction of the redesigned MacBook Air and MacBook Pro laptops. The new tablets went on sale this week.

Apple said its gross margin of 43.3% was a record for the September quarter.

Maestri said the strong PC sales also reflected a backlog of orders, caused by an extended shutdown of one of the factories that produce Macs, which Apple was able to fill during the quarter.

The company reported that sales of iPads were $7.2 billion, compared to the average estimate of $7.94 billion.

Apple wearables such as AirPods and other accessories achieved sales of $9.7 billion, slightly ahead of Wall Street’s forecast of $9.2 billion.

“They said they didn’t have particular problems with supply, so that seems to be a thing of the past,” said Creative Strategies consumer analyst Carolina Milanesi.

Growth in the company’s services business, which has boosted sales and profits in recent years, lifted revenue to $19.2 billion, below estimates of $20.1 billion.

Maestri said Apple experienced softness in digital advertising and games, as did others in the industry.

“Like other big tech companies, even Apple is suffering the negative impact of a worsening macro context and ongoing supply chain issues, although it has done a better job of navigating the challenging environment” , Jesse Cohen, senior analyst at Investing.com. .

In China, which has experienced a sharp economic slowdown, Apple reported fourth-quarter sales of $15.5 billion. That’s a gain from the previous quarter, when Apple reported sales of $14.6 billion.

Apple said it now has 900 million paying subscribers to its services, up from 860 million in the previous quarter.