As the global economic upheaval hits home, high-value companies are beginning to count their losses, even the most valuable company in the world.
On Thursday, Apple reported a profit decline of about 11% in the second quarter of the year compared to the same period of the previous year, although the company has continued to record growth.
The Cupertino giant reported revenue of $83 billion, a 2% increase from the same period in the past year. It is the highest revenue figure that Apple has posted during its fiscal third quarter, but it marked a significant slowdown in growth from the company’s 36% year-over-year revenue increase in the previous year.
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The downturn has been largely spurred by covid-induced shutdowns in China and logistics constraints. The result was seen in 1% drop in sales in Greater China, which used to be among Apple’s most lucrative regions.
However, Apple made more sales and profits than expected by Wall Street. The company’s shares rose nearly 4% in after-hours training on Thursday following the results, per CNN.
CNN quoted Apple as saying that its installed base of active devices hit all-time highs in each product category during the quarter. For instance, quarterly sales from Apple’s services, a crucial element of the company’s strategy for future growth, grew 12% to $19.6 billion, slightly below the $19.7 billion analysts had expected.
Apple CFO Luca Maestri said on a conference call with analysts Thursday that the company now has more than 860 million paid subscriptions across its various services, an increase of 160 million since last year.
“Our June quarter results continued to demonstrate our ability to manage our business effectively despite the challenging operating environment,” Maestri said in a statement with the results.
Per CNN, Apple declined to share revenue guidance for the current quarter because of the economic uncertainty. However, it added that Maestri said Apple expects its year-over-year revenue growth to accelerate in the September quarter compared to the June quarter, assuming that the macroeconomic situation and Covid-related impacts on its business do not worsen. He added that supply constraints are also expected to be lower than they were in the June quarter.
Maestri also noted the company’s efforts to make it easier for customers to purchase its products, including expanding installment plan payment and trade-in programs around the world.
Outside the covid lockdowns in China, tech companies are increasingly getting caught in the effect of crossfire between Russia and Ukraine that has touched nearly every sector of the global economy, forcing companies to downsize or stop hiring.
But CEO Tim Cook said Apple itself plans to “continue to hire people and invest in certain areas” but would be “more deliberate” in doing so.