Apple Inc. posted record quarterly sales that sailed past Wall Street estimates, a sign it was able to work through a supply-chain crunch fueled by the pandemic and chip shortages.
Sales climbed 11% to $123.9 billion in the fiscal first quarter, which ended Dec. 25, the company said Thursday. Analysts had predicted $119.1 billion on average. Profit also beat projections.
The surprisingly strong results suggest that fears of supply upheaval were overblown. Apple Chief Executive Officer Tim Cook had warned late last year that shortages could cost the company more than $6 billion in sales during the all-important holiday period. But the tech giant navigated the crisis and benefited from a flood of new products, including the iPhone 13, Apple Watch Series 7 and updated Macs.
The shares gained 5% in late trading. They had fallen 10% this year, hurt by a broader downturn in tech stocks, after gaining 34% in 2021.
Earnings rose to $2.10 a share, compared with the $1.90 estimated by analysts. The Cupertino, California-based company didn’t provide guidance for the current period, its fiscal second quarter, an approach that it’s used during the unpredictable Covid-19 era.
Investors are looking to Apple for reassurance after a recent rout battered technology stocks. Concerns about a sales slowdown and looming interest rates hikes have made the sector less appealing in the past month, with Apple itself suffering from the retreat. After topping a market value of $3 trillion in early January, Apple is now worth $2.6 trillion.
The company generated $71.6 billion in revenue from its flagship product, the iPhone, beating Wall Street estimates of $67.7 billion. That’s up 9.2% from the year-ago quarter. The sales period represented the first full quarter of iPhone 13 revenue.
The phone went on sale in September, several weeks earlier than the iPhone 12 did in 2020. Though the iPhone 13 was considered to be a modest update, users looking to upgrade to 5G service still clamored for the device.
“Supply-demand was largely in balance by quarter end, and China shipments were strong,” Bernstein analyst Toni Sacconaghi said in a note before the results were released.
The supply constraints hitting the iPhone 13 line and other new products, including the latest Macs and Apple Watches, resulted in shipment delays of several weeks. In Apple’s previous earnings report, the company said that the problems cost it $6 billion in sales — and warned that the holiday quarter would be even worse.
Check out Fortune’s Brainstorm Design Conference, taking place May 23-24 in Brooklyn, N.Y. For more details and to apply to attend, click here.
