Apple’s earnings nearly doubled in the most recent quarter, showing that the world’s richest and most valuable publicly traded company is showing little sign of slowing down.
Apple announced Tuesday that fiscal third quarter earnings were up 93 percent year over year to $ 21.7 billion, while revenue rose 36 percent to $ 81.4 billion, which is both exceeded analysts’ expectations.
The company has seen growth rates over the past few quarters that are more like a much smaller upstart than a corporate giant valued at nearly $ 2.5 trillion. It was fueled by people buying even more gadgets than usual during the pandemic as they increasingly relied on technology to work, study, and socialize. Apple also makes billions of dollars each quarter by taking a commission on app sales by other companies, a rapidly growing part of its business that has drawn lawsuits and regulatory attention.
Apple said its iPhone sales were up 50 percent year over year to $ 39.6 billion, an increase that was high even for its high standards. The surge was especially surprising considering the company will launch new phones in September, which often results in a lot of people waiting to buy new iPhones.
IPhone sales had declined in a saturated smartphone market for the past few years, but the pandemic has largely changed that. The April-June period was the third straight quarter of double-digit growth in iPhone sales, with much of the growth coming from existing customers upgrading their phones.
Apple also sold more of all of its other products, including iPads, Macs, and wearable devices like the Apple Watch and AirPods. The company’s sales grew 58 percent in all geographic areas, led by Greater China, for the third straight quarter in which sales there rose more than 50 percent.
Apple’s reliance on China to sell and manufacture its products has forced the company to compromise there, including storing its users’ data on Chinese government servers and censoring certain apps.
The company also posted one of the highest gross profit margins ever at 43.3 percent, which shows how efficient its huge business has become.
In a conference call, Luca Maestri, the company’s chief financial officer, attributed the rising margin to cost savings and a greater reliance on revenue from the internet services business, which includes app sales from other companies and has an unusually high profit margin.
Maestri said Apple effectively keeps 70 cents for every dollar it makes in its services business before considering certain operating expenses like research and development. He said Apple’s gross margins on its devices were 36 percent for the quarter.
One of the few challenges Apple faces is the global shortage of computer chips that its devices rely on. The shortage affects the production of a wide range of products, from automobiles to washing machines. Maestri said that while Apple has largely avoided major impacts so far, Apple expected a shortage of chips to hurt its iPhone and iPad sales during the current quarter.
Partly because of this, he said, Apple expects revenue growth to be slower in the current quarter, although it would still be in the double-digit range. This forecast caused Apple shares to drop 1.5 percent in after-hours trading.