Apple reports iPhone shipments of over $50 billion for the March quarter

After the stock market closed today, Apple reported its earnings for the quarter that ended in March. During that period the company sold $50.57 billion worth of iPhone handsets for a 5.5% gain year-over-year. Apple CEO Tim Cook called it a successful quarter, especially with "switchers" or those who had been using an Android handset and is now switching to iOS.

Cook told CNBC that "We had a record level of upgraders during the quarter and we grew switchers, strong double digits," the executive stated. The strong iPhone results came even while consumer confidence has been declining. "It’s clearly a strong cycle," Cook said. Apple iPad sales during the quarter declined 2% from $7.81 billion to $7.65 billion year-over-year.

During the quarter, Apple started shipping the iPhone SE 3, its low-priced budget handset. The device resembles the iPhone 8 with a 4.7-inch LCD display, but it is powered by the same chipset used to power the iPhone 13 series.

Cook blamed shortages in the supply chain for the tough quarter experienced by the iPads. The CEO said that the tablet had to deal with "very significant supply constraints" during the three months that ended in March. Overall, the CEO said that Apple's financial performance was much better than he anticipated.

Apple's Services unit which includes Apple Pay, the App Store, Apple Music, Apple Card, Apple Maps,iCloud, Siri, Apple TV+, and more, saw revenue jump 17.28% to $19.82 billion. That topped Wall Street's expectations by only .51% which was well off the 3% to 8% jump over expectations that Apple reported over the last two years.

Apple CFO Apple CFO Luca Maestri said that comps in the Services were strange during COVID "because we’ve had lockdowns and then reopenings and so on." Maestri said in an interview with CNBC that there were times during the last two years when "digital content went through the roof." The Wearables category, which include the Apple Watch, generated $8.81 billion in revenue for the March quarter, down 12.4%.

Sales in the Americas rose 19.2% to $40.88 billion while those in Europe declined 4.6%. Sales in Greater China increased 3.5% to $17.73 billion. For the first quarter, revenue was $97.28 billion with $25.01 billion in net income resulting in $12.54 in basic earnings per share. That translates to an 8.6% annual gain in revenue, a 5.8% hike in net income, and a 9.2% increase for earnings per share.

CFO Maestri warned during the conference call that supply constraints related to COVID 19 could reduce revenue in a range between $4 billion and $8 billion. COVID-related lockdowns are also hurting Apple. Tim Cook said that Apple is not immune to COVID-related supply chain shortages.

Cook also said, "This quarter’s record results are a testament to Apple’s relentless focus on innovation and our ability to create the best products and services in the world. We are delighted to see the strong customer response to our new products, as well as the progress we’re making to become carbon neutral across our supply chain and our products by 2030. We are committed, as ever, to being a force for good in the world — both in what we create and what we leave behind."

Apple declared a cash dividend of 23 cents per share, a 5% increase. The board also announced that it will authorize $90 billion in share buybacks, maintaining its position as the public company that spends the most buying back its own shares.

During regular trading hours, Apple's shares rose $7.07 or 4.52% to $163.64. But in after-hours trading, Apple gave back about half of those gains or $3.63 (2.22%) and finished the day at $160.01. The company now has a market cap of $2.67 trillion dollars. The company's 52-week high is just shy of $183.