Apple’s supply chain challenges have improved considerably, sending shares up 5% in extended trading on Thursday. Apple’s revenue of $123.9 billion for the quarter ending December 2021 equates a year-on-year annual growth or decline from the then-record-setting $111.4 billion a year ago. The company’s earnings per share is $2.10 for the quarter, up from $1.68 in the Q1 2021 results.
The tech giant has delivered a solid beat on earnings despite the ongoing COVID-19 pandemic and inflation. Tim Cook, Apple CEO, said this quarter’s record results were made possible by the company’s innovative line up of products and services ever.
Apple had marked the holiday quarter with the launch of Apple Watch Series 7, third-generation AirPods, 14-inch MacBook Pro and 16-inch MacBook Pro, new color options for the HomePod mini, and the Apple Polishing Cloth. The new revenue was likely driven by iPhone 13 and iPhone 13 Pro models. Apple’s wearables, home and accessories segment reached $14.7 billion in revenue, up year-on-year from $12.9 billion. The company’s services revenue also increased significantly to $19.5 billion from $15.7 billion in the year-ago period.
However, iPads were a major disappointment for the company. Sales declined from 2021 and missed analyst estimates. Analysts say it was likely because Apple could not make enough iPads and prioritized other devices. Services, including iCloud, Apple Music, search licensing and App Store fees saw significant growth – rising 25% annually to $19.52 billion.
“We are gratified to see the response from customers around the world at a time when staying connected has never been more important,” Cook said. “We are doing all we can to help build a better world, making progress toward our goal of becoming carbon neutral across our supply chain and products by 2020.”
Apple expects the March quarter to be solid year-over-year revenue growth. It expects supply constraints in the March quarter to be less than they were in the December quarter. In terms of supply challenges, Cook said the December quarter was worse than Apple’s September quarter. “Our biggest issue is chip supply on legacy nodes. And we are doing okay on the leading edge stuff,” he said.