Apple weathered supply chain snarls at the end of 2021 that have tripped up the global electronics market and other industries, announcing Thursday an 11% increase in revenue and a 20% jump in profit in its most recent quarter.
Apple, the world’s most valuable public company, beat Wall Street analysts’ expectations, easing fears that the tech industry’s long period of fast growth may be coming to an end. It made $34.6 billion in profit off record revenue of $123.9 billion in the three months ended in December, although its revenue growth continued to slow from 29% in the prior quarter.
As usual, the iPhone drove sales for Apple, which briefly crossed $3 trillion in market value earlier in January before sliding back to about $2.6 trillion by Thursday. Sales of iPhones totaled $71.6 billion, up 9% from a year earlier. Demand for the new iPhone 13 had been expected to juice sales, but the company has been warning for months that computer chip shortages and pandemic-related manufacturing problems in Asia were likely to limit supply and hamper revenue.
Apple CEO Tim Cook said in October that supply constraints had cost his company $6 billion in revenue during its fall quarter and that he expected even more of a loss in the quarter that includes the holidays.
Apple announced a slate of new hardware products in the fall, including new models of its MacBook Pro laptop, AirPods, iPad and Apple Watch. It is working on an augmented-reality headset that could compete with offerings from companies such as Meta, Facebook’s parent, as technology companies increasingly jockey for influence in the budding metaverse, a futuristic online universe.
Apple also benefited from strong growth in its services business, which includes its App Store. The services business was up nearly 24% in the quarter from a year ago, to $19.5 billion.
Apple said it planned to use nearly $27 billion of its cash to pay dividends to shareholders.
Apple’s positive results came near the end of a week of wild trading on the stock market that was due in part to fears about how quickly the Federal Reserve might raise interest rates in an attempt to curb inflation. Higher interest rates make riskier investments, like technology stocks, less appealing, adding to concerns that the pandemic-fueled boost to technology companies could soon be ending.
But Microsoft and Tesla, despite dealing with supply chain woes of their own, posted record profits this week and beat industry expectations. Next week, Alphabet, Google’s parent, and Amazon will report their results for the last three months of 2021, providing insight into the health of online advertising and retail.