Apple
Overall, Apple shares are down about 10% from its recent highs. Despite its $2.6 trillion market cap, the company continues to grow at a rate faster than most stocks while maintaining much higher profit margins of 26%. Given its increasing growth in subscriptions, software, and services, this is likely to expand in coming years.
Inside the Numbers
In Q4, Apple reported $2.10 per share in earnings, exceeding estimates of $1.89. This was a 25% increase from last year. Revenue was up 11% and also beat expectations at $123.9 billion vs. $118.66 billion. Gross margins also beat at 43.8% vs 41.7%.
iPhone revenue came in at $71.63 billion and beat estimates of $68.34 billion which was 9% higher than last year. Services revenue also beat at $19.52 billion vs. $18.61 billion, a 24% increase from last year. The only category that missed expectations was iPad revenue which came in at $7.25 billion which was below expectations of $8.18 billion, 14% decrease.
Apple continues to not provide any guidance as it hasn't done so since the pandemic. However, in an interview, CEO Cook said that the company expects positive revenue growth in Q1 and the full year and for supply constraints to improve.
The results were even more positive considering that management warned last quarter that was struggling with supply chain issues. In an interview, Cook said: "Our biggest issue is chip supply, it's chip supply on legacy nodes. And we're doing okay on the leading edge stuff."
This quarter also marked the first full quarter of iPhone 13 sales, which would reveal the strength of demand for its product. This figure could have been likely higher without supply chain constraints.
Another bright spot was Services, which includes iCloud, Apple Music, search licensing and App Store fees, which had 25% revenue growth and nearly reaching $20 billion. This is the unit contributing to Apple's gross margin expansion.
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