Apple Beats Quarterly Profit, Sales Estimates—Despite Interest Rate Headwinds

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Apple, which accounts for 7% of the S&P 500's breadth, made $24.2 billion in profit during the first three months of 2023.

Thursday afternoon, as investors grow further bullish on the world’s largest company’s strong sales and cash flow.Apple notched $94.8 billion in sales and $1.52 in adjusted earnings per share for the three-month period ending April, smashing consensus analyst estimates of $92.9 billion and $1.43, respectively, according to FactSet.

It was the company’s best-ever quarter for its services business and its best spring quarter for iPhone sales, Apple’s billionaire CEO Tim Cook said in a statement accompanying the release. The technology behemoth reported a toughly 20% decline in iPhone revenues from the prior quarter but a 2% bump year-over-year, though the dip was less than analysts expected in the quarter following the release of the iPhone 14.

Higher costs weighed on Apple’s bottom line: The company reported $1.9 billion in interest payments over the last six months, a more than 30% increase from the same period last year as the Federal Reserve continues to hike interest rates.After rallying more than 300% between March 2020 and its late 2021 peak, shares of Apple crashed back to earth in 2022, shedding 27%, headlining a broader slump among tech stocks thought to be more sensitive to a higher interest rate environment.

expectations on the top and bottom line in its February earnings report, Apple shares have roared back, rallying 32% year-to-date. Apple remains by far the most valuable company in the world with its $2.65 trillion market cap.About $555 billion. That’s how much market capitalization Apple has gained year-to-date.That exceeds the total market value of both Tesla and LVMH, the world’s ninth and 10th largest companies.

 

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