Apple (AAPL) Tops Earnings Estimates as iPhone Excels Again, Analysts Positive

Shares of Apple (NASDAQ: AAPL) are up 2.5% in premarket Friday trading after the tech titan reported better-than-expected FQ3 results.

Apple reported an EPS of $1.20 on revenues of $82.96 billion to beat the expected $1.16 on revenue of $82.76 billion. The beat was driven by another quarter of the iPhone outperformance with sales coming in at $40.67 billion, much better than the $38.85 Street consensus.

Both Mac and iPad missed their targets with Apple blaming supply chain constraints. Services came in at $19.60 billion, slightly lower than the $19.75 billion consensus.

Apple also said it generated $23 billion in operating cash flow during the June quarter. The company also declared a cash dividend of $0.23.

As far as the outlook is concerned, Apple CEO Tim Cook said he expects “revenue to accelerate in the September quarter despite seeing some pockets of softness.”

Jefferies analyst Kyle McNealy said the results were better than expected.

“Key takes: 1) iPhone units of 48.4m (JefE) declined -1% Y/Y; 2) iPad is stabilizing and came in ahead of low expectations; 3) Mac declined -10% Y/Y but was held back significantly by supply chain; and 4) Services and Wearables are showing signs of getting held back by macro but premium devices including iPhone still solid,” McNealy told clients in a note.

Deutsche Bank analyst Sidney Ho praised Apple for delivering solid results in a challenging macro environment.

“We are impressed with the company's gross margin performance, which came in above the guidance range, especially given FX headwinds... Post results, we are more confident that AAPL should fare better than many of its smartphone/PC peers in a challenging environment, and we only tweak our CY22/ CY23 estimates slightly. With the stock trading at a more reasonable valuation (at ~24x CY23E EPS) and AAPL being viewed as a good hiding place in a volatile market,” Ho wrote in a research note.

Finally, Citi analyst Jim Suva described the results as “great” and especially paid attention to Apple’s 1.8 billion installed base.

“While there are macro concerns, we continue to see several positive drivers for Apple’s products/services,” Suva said.

By Senad Karaahmetovic

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