2023-08-04 10:22:00
The star of American tech values has not shined for several months. When publishing its delayed third quarter results on Thursday evening, Apple posted a net profit up 2.3% year on year, to $ 19.9 billion, and a gross margin rate up significantly, to 44.5% once morest 43.2%, and expects to see it be between 44 and 45% in the fourth quarter, a historically high level, highlighted Luca Maestri, the group’s chief financial officer.
But this presentation to investors was weighed down by the announcement of a turnover of 81.8 billion dollars, down 1.4% compared to the third quarter of 2022. This is the third quarter of in a row in retreat. Nevertheless, investors expected even less revenue. ” Revenue beat market consensus by 8% “, Recognizes in a note, Josh Gilbert, market analyst at eToro.
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Still, the markets are looking gloomy. In electronic trading following the close of the New York Stock Exchange, Apple’s stock was down more than 2%. And for good reason, the firm, which has a stock market valuation of more than 3,000 billion dollars, has not experienced three consecutive quarters of decline in its income since 2016 when its sales fell by 7.7% over the year. of a loss of speed of the iPhone, which is still found today at the heart of the problem.
Decline in iPhone sales offset by services
The group’s locomotive for more than a decade, Apple’s smartphone suffered this quarter, with sales down 2.4% over one year, more marked than the market expected. Same observation for sales of Mac (-7%) and iPad (-20%), while connected products show growth of 2.4% over one year.
This drop in the group’s main activities is however partially offset by the services activity, which includes the App Store application store, the Apple Music streaming platform and the cloud. This branch has, in fact, reached a new historic record of 21 billion dollars in revenue and now accounts for more than a quarter (26%) of the company’s turnover, which was originally entirely focused on its IT and connected equipment. The American apple giant now has more than a billion subscriptions to its various services, said its general manager, Tim Cook, quoted in the press release, up 150 million over the last 12 months.
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« Apple’s results illustrate the strategic shift towards services, which are becoming an essential element commented Insider Intelligence analyst Jeremy Goldman, pointing out that this activity was ” much more profitable than the physical products on which it has built its reputation. »
Global consumption down, excluding China
Geographically, sales fell in Asia, excluding China, and in the United States, while Europe was doing well. We declined in the United States because the smartphone market has been in decline for several quarters “Explained Luca Maestri during the press conference presenting the results. ” It’s getting harder and harder to get customers to replace their devices so frequently than in the past, given their price and less buoyant economic conditions, said Jeremy Goldman of Insider Intelligence.
On the other hand, the company saw its sales in China accelerate by 7.9% year on year, while they had contracted in the previous quarter. The Middle Empire is now at the center of the Californian company’s concerns since it represents nearly 20% of its quarterly turnover.
More ” investors are concerned that this key region is set to experience deflation next week, which might hurt sales. In deflationary environments, consumers become cautious, anticipating better deals due to lower prices, and therefore reduce spending, especially on high-value items », warns Josh Gilbert.
A fourth quarter in the same vein
Apple nevertheless wants to reassure its shareholders. The group expects in the fourth quarter (from the beginning of July to the beginning of October) results “similar” to those of the previous three months. Mac and iPad sales should suffer from an unfavorable comparison effect, because in the fourth quarter of 2022, the group was able to catch up on production delays linked to the closure of sites in the spring, due to cases of coronavirus.
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Nevertheless ‘nWe expect the iPhone and services to accelerate in the fourth quarter, announced Luca Maestri, while Mac and iPad should experience a double-digit decline.
« Apple is clearly facing challenges in a tough macro environment, but the upcoming release of the new iPhone next month mightn’t come at a better time for Tim Cook and his team. Rumor has it that the latest model will pack the biggest iPhone updates in many years and help Apple’s update cycle kick in once more “, anticipates the eToro analyst for his part.
(With AFP)
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