Apple Inc.’s holiday sales and profit totals were staggering once again, and CEO Tim Cook gave just enough of a forecast to satisfy Wall Street on Thursday — but not enough to feel totally comfortable.
Apple AAPL,
Apple’s holiday season deserved that move. Profit nearly hit $35 billion in three months, and was more than the total net income of Amazon.com Inc. AMZN,
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IPhone sales set another all-time record, with revenue growing 9% to $71.6 billion — a “monster iPhone number, despite chip shortages,” Wedbush Securities analyst Dan Ives said in a note. Mac sales surged 25% to top $10 billion in a quarter for the first time, and nearly hit $11 billion. Apple saw growth nearly across the board, with the exception of the iPad, which Cook blamed on supply constraints.
The lessening of supply constraints was at the heart of the forecast that Cook provided, saying that Apple would fare better after production of the iPhone and other products stop being hemmed in by shortages of semiconductors and other components.
“We’re not guiding by product and constraint by product level,” Cook said. “But overall, we do see an improvement in the March quarter in terms of the constraints going down versus what they were in the December quarter.”
Without giving a number, Chief Financial Officer Luca Maestri gave a somewhat hopeful direction for Apple’s sales.
“We expect to achieve solid year-over-year revenue growth and set a March-quarter revenue record despite significant supply constraints,” Maestri told analysts on the company’s conference call.
However, executives said revenue growth would decelerate sequentially, and added that the services business, specifically, will see its growth decelerate. That segment also had record revenue in the holiday quarter, and is not as cyclical as some of Apple’s other products.
“This is due to a more challenging compare because a higher level of lockdowns around the world last year led to increased usage of digital content and services,” Maestri contended.
The massive holiday season for the iPhone 13 should have been enough to satisfy most investors, but as Wall Street slaps down any company during this earnings season that does not provide a worthwhile forecast amid massive uncertainty, Apple said enough to slide by.
