Apple reassures with stellar festive sales and excites with augmented reality products move
Apple Inc (NASDAQ:AAPL) shares climbed back towards record highs after the iPhone maker beat expectations for quarterly sales as festive demand surged and product delays during December were overcome. With 785mln people now subscribing to its music streaming and gaming businesses, chief executive Tim Cook suggested Apple will start looking at developing products for augmented reality (AR), with the company also developing plans for an AR headset and glasses in the next year or so as it looks to move into the Metaverse. “We see a lot of potential in this space and are investing accordingly,” he teased. Net sales for the three months to the end of December, the first quarter of the tech titan’s fiscal year, climbed 11.2% to US$123.9bn, with growth from both its products and services arms. The Wall Street consensus forecast was for around US$119bn. Sales of the iPhone were US$71.63bn, laptops US$10.85bn, Wearables, Home and Accessories US$14.7bn, iPads US$7.25bn and services US$19.25bn, all apart from iPads higher than predicted. Operating profit surged 24% to US$41.5bn, despite an 18.2% increase in costs. “I think everybody’s seeing inflationary pressure,” said Cook. “There’s no two ways about that.” He said logistics costs were “very elevated” but “hope[s] that at least a portion of that is transitory, but the world has changed and we’ll see”. The shares rose 5% in after-hours trading to US$167.25, regaining some of the ground lost since topping US$182 in the first days of 2022. Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said Apple has “shown its core strength” in the quarterly numbers. She said the positive initial reaction from the market was “despite concerns continuing to swirl about the upcoming Fed announcement, and what this could mean for US high-growth companies. “The wider tech sell-off has made for difficult watching, but while some are bolting for the exit when it comes to US tech, this is likely a case of turbulence, not a mayday situation – especially for Apple.”
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