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                Apple's Q2 2022 Results Help Brighten Dark Times

   Michael E. Cohen

   Apple has announced financial results for the second fiscal quarter of
   2022, and they aren't too shabby: profits of $25 billion ($1.52 per
   diluted share) on revenues of $97.3 billion. The company's revenues are
   up 9% compared to the year-ago quarter with profits up by more than 5%
   (see [1]Apple's Jaw Dropping Q2 2021 By The Numbers, 28 April 2021).

   Regionally, the Americas were the big winners for Apple during the
   quarter, with revenues up 16%. The run of good fortune crossed the
   Atlantic, with Europe reporting a 4.4% revenue increase, while across
   the Pacific the ever-important Greater China region, although troubled
   with renewed pandemic problems, still managed a 3% revenue increase
   year-over-year and set an all-time March quarter revenue record. On the
   other hand, Japanese revenues were flat compared to last year's
   results, and the rest of the Asia Pacific region saw revenue decline by
   7% compared to last year.

   The iPhone continues to dominate Apple's revenue, making up 52% of
   Apple's sales in Q2. Although iPhones produced only a modest
   year-over-year revenue increase of 5.5%, they still achieved a Q2
   revenue record, bringing in $50.6 billion. 'We could not be happier
   with the iPhone 13 products,' CEO Tim Cook said.

   The iPad slipped a bit, with iPad revenue down2.2% year over year,
   bringing in $7.6 billion. Cook, in his remarks during the analysts'
   conference call, implied that these were strong results considering the
   supply chain constraints that affected iPad production.

   The Mac had an especially impressive quarter'in fact, a March quarter
   record'thanks to the popularity of the new Apple silicon models. Mac
   revenue shot up 14.6% over the year-ago quarter, pulling in $10.4
   billion. CFO Luca Maestri said the past seven quarters have each hit
   all-time highs for the Mac.

   Services revenue continues to skyrocket, up 17.3% year over year to the
   tune of $19.8 billion'a Services revenue record. Cook highlighted the
   Apple TV+ exclusive movie Coda winning Best Picture at the Oscars'¢,
   and the addition of Friday Night Baseball to its entertainment
   offerings. Maestri said Services growth was thanks in part to
   all-time-high installed bases for every Apple device category.

   The Wearables category continues to be a strong revenue generator,
   showing 12.4% growth in the past year and drawing in $8.8 billion,
   another Q2 record. Maestri mentioned that two-thirds of Apple Watch
   buyers during the quarter had never owned one before.

   As for the investor call itself, nearly every question was about either
   inflation or the supply chain. Maestri pointed out Apple's good fortune
   in having a burgeoning Services business that is not hampered by
   lockdowns in Shanghai or freight congestion. An unusually dour-sounding
   Cook himself said he was looking forward to 'a better day.'

   He admitted that yes, Apple had seen inflation, and given all of the
   supply chain challenges, Apple had done a good job. Considering how
   many new products Apple has shipped since the beginning of the COVID-19
   pandemic, including a processor migration for the Mac, he was justified
   in that bit of self-congratulation.

   In less troubling times, Apple's Q2 results would still be stellar, but
   in a wobbly world, Apple's solid fiscal and operational performance
   offers both investors and customers an encouraging example of
   competence and optimism. We could all use a bit of both.

References

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