After hours on January 28, Eastern Time, Apple announced the first quarter of 2022 (that is, the fourth quarter of the natural year of 2021). Although the shadow of the supply chain is not dispersed, revenue and profit still far exceed the market's consensus expectations.
Driven by strong earnings reports, as of writing, Apple is up more than 5% after hours.
Apple's revenue in the quarter was $123.95 billion and net profit was $34.69 billion, both of which hit a record high, of which net profit has exceeded market expectations for 21 consecutive quarters. Apple CEO Tim Cook attributed this quarter's historic results to "the most innovative lineup and services ever made."
New products broke out across the board Hardware revenue exceeded expectations
From September to November last year, Apple held three consecutive press conferences, and new products broke out in the year-end shopping season. Product revenue totaled $104.43 billion in the quarter, far exceeding analysts' expectations of $99.30 billion.
iPhone revenue of $71.63 billion, outperforming market expectations of $67.74 billion, up 9.2% year-over-year. This quarter is the first full quarter of iPhone 13 sales, the 13 series product matrix has brought a strong "replacement tide", iPhone products account for 58% of total revenue, fist products are still very capable.
Mac revenue of $10.85 billion, better than analysts' expectations of $9.53 billion, up 25% year-over-year, is the strongest growth product category in hardware. Apple released the MacBook Pro with M1 Pro and M1 Max chips in mid-November, and most of the Mac sales came from the latest model.
iPad revenue of $7.25 billion fell short of analysts' expectations of $8.11 billion. Apple's chip shortage, which was previously disclosed in its earnings report, continues to affect iPad supply.
In addition, wearables, home and accessories revenue of $14.7 billion also outperformed market expectations, up 13% year-on-year and a new quarterly revenue for this category. The new apple watch, the new generation of AirPods headphones and so on are indispensable. It is reported that 1/3 of the Apple Watch buyers in the quarter are buying for the first time.
The services division reached a new high for four consecutive quarters
Apple's services division generated $19.52 billion, up 24 percent year-over-year and a record high for four consecutive quarters, but grew slightly weaker than the 25.6 percent pace in the previous quarter.
The current services division currently contributes less than one-fifth of Apple's revenue, but it is growing faster than the product division. The services segment grossed 72.4% gross margin in the quarter, well ahead of the hardware segment's 38.4% gross margin. Driven by the services division, Apple's overall gross profit margin for the quarter was 43.8%, better than the expected 41.7%.
On the hardware side, all product lines except the iPad grew from the same period last year and exceeded market expectations, with 1.8 billion active devices. On the server side, iCloud, music, video, payment, advertising and other service businesses have reached a record high, and the number of cross-platform paid subscribers has exceeded 785 million. Apple once again handed over a near-perfect earnings report.
Greater China remains the "brightest star"
The low base effect during the outbreak of the epidemic in 2020 and the wave of working/learning from home in the first three quarters of 2021 have put pressure on the year-on-year comparison of earnings in the next few quarters. In the fourth quarter of last year, the year-on-year growth rate of major geographic market segments slowed down as scheduled. Greater China increased by 21% year-on-year, the most outstanding.
Apple's revenue in Greater China in the quarter was $25.783 billion, up nearly 21% year-on-year or more than $4.4 billion, the strongest growth pole of any region. In the first three quarters of 2021, it increased by 87%, 58% and 56% year-on-year.
Data released by counterpoint Research, a previous research firm, showed that Apple's market share in China hit a record high in the fourth quarter of 2021, and for the first time since the fourth quarter of 2015 ( when the iPhone 6 boom swept across China ) it became the country's largest smartphone supplier.
Revenue in the Americas increased by more than 11% year-over-year, with a year-over-year increase of 35%, 33% and 20% in the first three quarters of 2021.
The European market grew 9% year-on-year, with a year-on-year increase of 56%, 34% and 23% in the first three quarters of 2021.
Revenue in Japan fell 14% year-over-year and increased by 49%, 30% and 19% year-on-year in the first three quarters of 2021.
Revenue in the Asia-Pacific region, excluding China and Japan, increased 19% year-over-year, up 94%, 29% and 26% year-over-year in the first three quarters of 2021.
Supply chain shadows remain but are expected to improve this quarter
The only fly in Apple's earnings report was lingering supply chain issues, which resulted in a loss of more than $6 billion in the quarter, in line with previous quarter's guidance.
Cook told the media that "our biggest problem is chip supply", but said that mainly the lower-end chip supply has challenges, not involving the core processor in the flagship phone, and therefore, iPhone sales have withstood the drag of supply chain restrictions.
It is worth mentioning that the electric vehicle giant Tesla announced a super strong financial report on Wednesday with a record high revenue and profit, but due to the early warning supply chain bottleneck, the stock price plunged 11% the next day.
Somewhat reassuring to investors, Cook pointed out on an earnings call that supply chain problems were worse in the fourth quarter of last year than in the third quarter, but that it is expected to improve from January to March this year. In addition, Apple also revealed on the conference call that it has seen a lot of potential in the AR field. Cook was programmed by the problem metacosm, admitting that "new technologies are being explored."