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Apple Posts Robust Revenue but Q2 2022 Net Profit Falls

Industry: Technology
Current: Company Performance

Apple Inc. reported an almost 11% decline in profit after weathering supply constraints and shutdowns in China
iPhone sales remained resilient despite economic challenges
The company revealed that it posted a record revenue of $83 billion for the second quarter, which was up 2% year-over-year

The quarter with the lowest sales for Apple since the July–September period in 2020 prior to the launch of the iPhone with 5G capabilities saw profits drop to $19.4 billion, according to reports. From $81 billion in the third quarter of the previous financial year, revenue increased 1.87% to a new record of almost $83 billion. iPhone sales increased 2.8% to a record-breaking $40.67 billion in the second quarter.

Tech Companies Struggle as Economy Slows Down

Google, Microsoft, and Meta already revealed plans to limit hiring or cut jobs. Tesla’s CEO Elon Musk announced that the company would reduce its employment by 10%, while Netflix, which earlier in 2022 lost one million subscribers, fired 300 staff members. The sector as a whole struggled for months due to increasing interest rates, inflation, and weak economic development after registering record earnings during the pandemic. The Nasdaq composite index, which is heavily influenced by technology, is down 26% so far in 2022. Apple remained more stable than other tech behemoths that reported a halt in recruiting and layoffs. However, the company intends to be more careful in 2023 by reducing hiring and spending. A recession is anticipated.

Apple Says it Fought Through a ‘Challenging Operating Environment

Apple said that it fought through a “challenging operating environment” to keep sales on track in the second quarter but plans to be more “deliberate” with spending decisions, including hiring, in the coming months. Despite Apple’s strong quarterly results, there were some weak spots. Revenue for Mac computers was lower than expected and saw its first decline in revenue since the start of the pandemic when people rushed to purchase new at-home tech gear.

India Revenue Doubled

Apple is doing well in India. According to CEO Tim Cook, the company's revenue in India doubled during the June quarter. India continues to be an Android-dominated market, but Apple's sales have been rising. Tim Cook, the CEO of Apple, claimed that the iPhone was "very successful" in India. Apple’s Services business — App Store, Apple TV+, Music among others — has also done quite well in India. Apple CFO Luca Maestri said the company has “all-time records in many countries around the world including the US, Mexico, Brazil, Korea, and India.”

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