Apple's solid fiscal Q2 2022 quarter in five easy charts

The ups and downs of Apple’s revenue, earnings per share, iPhone sales, services and wearables.

Apple posted solid March quarter results, beating Street estimates nearly across the board with record March quarter revenues of $97.3 billion, up 8.6% year over year, and EPS of $1.52, also up 8.6%. The stock, which closed up more than 4.5% Thursday, popped another 4% in after-hours trading before falling into the red during the earnings call. Traders and their algos were reportedly freaked out by management's warning that the headwinds from COVID shutdowns and silicon shortages in the "Shanghai corridor" would be stronger in Q3 than they were in Q2 -- setting quarterly revenues back somewhere between $4 and $8 billion.

From the press release:

“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,” said Tim Cook, Apple’s CEO. “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.”

“We are very pleased with our record business results for the March quarter, as we set an all-time revenue record for Services and March quarter revenue records for iPhone, Mac, and Wearables, Home and Accessories. Continued strong customer demand for our products helped us achieve an all-time high for our installed base of active devices,” said Luca Maestri, Apple’s CFO. “Our strong operating performance generated over $28 billion in operating cash flow, and allowed us to return nearly $27 billion to our shareholders during the quarter.”

Apple’s board of directors has declared a cash dividend of $0.23 per share of the Company’s common stock, an increase of 5 percent. The dividend is payable on May 12, 2022 to shareholders of record as of the close of business on May 9, 2022. The board of directors has also authorized an increase of $90 billion to the existing share repurchase program.

Below: The five charts. Click the second column to see year-over-year growth. (Not seeing the charts? Try the website.)

30 Comments

  1. Dan Scropos said:
    The dividend raise is paltry. I don’t get the justification of withholding $160 million for another penny raise to $.24.

    7
    April 28, 2022
    • Robert Paul Leitao said:
      Dan: An additional penny per quarter or four cents per year would work out to an additional $640 million per annum on 16 billion shares. I was hoping for $.25 per quarter or a solid $1 per share per annum. The priority is definitely on share repurchases for another 12 months. The dividend will continue to rise each year and I expect more in future years than the 4.55% increase in the dividend offered this year. The company has ample net cash available to fund a higher dividend payout.

      0
      April 29, 2022
  2. Jacob Feenstra said:
    I’m more interested in buy-backs. Dividends don’t mean that much to me.

    5
    April 28, 2022
  3. Jerry Doyle said:
    A one penny dividend increase…. Ummmmmmm! Value stock? No. Growth stock????? Apple may be of the mindset that it sees plenty of new growth ahead satisfying its shareholders…..shareholders don’t need increased dividends says Apple. Shareholders will more than be compensated in rising share price from revenues derived in new growth going forward. Apple says: we remain a growth stock. Trust us! ………..a penny increase?????? What else can I think?????

    2
    April 28, 2022
  4. Troy Thoman said:
    Even buybacks seem like they could be higher. $90B/year is $22.5B/Q they made $25B this quarter… but made $35B last quarter and likely will make another $50B in the rest of the year. That’s $110 B so cash will go up $20B. I thought they were trying to get cash neutral. Shouldn’t they be spending more than they make to get to cash neutral?

    2
    April 28, 2022
    • Rodney Avilla said:
      When is the last time that Mgmt. has stated that becoming cash neutral is still their goal? I truly cannot remember when. I hope that it is still true.

      1
      April 29, 2022
  5. Daniel Epstein said:
    The penny increase per quarter is the easiest amount for the Apple accountants to deal with while still claiming an increase in the Dividend. And a 2 penny increase cost would also be trivial to the company. Personally I think they could have afforded both the 2 cent increase and the 90 billion buyback increase. But of course the share buybacks are the biggest part of the capital return program as far as Apple is concerned. Much more flexibility as to when, if and how much. Also it is not a taxable event to the shareholders. If the law about buybacks changes then maybe Apple will shift its strategy. Maybe the poor after hours response to the earnings call will drive Apple to increase the buyback rate earlier rather than later.

    2
    April 28, 2022
  6. While the digital pundits crow about Luca Maestri’s “$4 to 8 billion” comment ~$190 billion sits in cash & marketable securities. After hours trading after reporting seldom reflects the trading activity or trends over the next few days.
    I’m impressed again with Services growth.
    ⅔ of Apple Watch buyers are new to the product. This is an ongoing trend but always reassuring.
    Apple is now in ‘the heart of Seoul’ or is it heart of soul? Interesting new location given Korea’s App Store regulatory environment.
    ‘Installed base at an all-time high.’ – priceless!

    7
    April 28, 2022
    • Rick Povich said:
      And another data point, a week or so ago (I believe), Piper Jaffray reported that something like 80 percent of teens said they owned an iPhone, and another 80 percent said they plan to buy another iPhone.

      That Apple stickiness leads to long-term loyalty

      3
      April 28, 2022
  7. Kathy Corby said:
    I was watching the minute by minute changes in after hours stock price. The real drops came when Tim refused to be optimistic about Covid constraints, the Asian market, persistent chip shortages, shipping costs, and FX headwinds. I listen to every call, and this is as negative as I have heard him in a while. Sadly, NASDAQ will break long-term support tomorrow, as Amazon craters and Apple stock likely drops further. I think it is look out below time.

    4
    April 28, 2022
    • Robert Paul Leitao said:
      Kathy: That was the singularly worst conference call with analysts I can remember and I’ve listened to almost every call since they were made available over the web. In my view, Tim and Luca seemed unprepared to respond to intelligent questions from the analysts. For example, management is estimating a $4 billion to $8 billion revenue impact from supply constraints in the June quarter but they don’t have a revenue guide or even a revenue range? How does that work? Management won’t say if revenue will be above or below last June quarter’s results? Really? We are already a month into the quarter. I’m a bit stunned by the vague responses even to questions from analysts that were positive on March quarter results and were simply asking for context on conditions in the market today. Why were Tim and Luca so resolutely vague? I don’t have an answer. I am very disappointed by the way they handled the call.

      1
      April 28, 2022
      • Jerry Doyle said:
        @Robert Paul Leitao: “…. Management won’t say if revenue will be above or below last June quarter’s results? Really? We are already a month into the quarter.”

        Correct. Tim said the manufacturing plants previously shut down now are reopened, up and running. So, one would think the loss count is definable after operations all are green lighted.

        1
        April 29, 2022
  8. T R said:
    I need to relisten, and I will. Thanks, Kathy and RPL.

    I certainly heard the “Tim refused to be optimistic about Covid constraints, the Asian market, persistent chip shortages, shipping costs, and FX headwinds”

    There were some pretty repetitive, relentless, almost gotcha questions in that the analyst knew better than expect an answer.

    I disagree that this was an awful and negative call. I think both TIm and Luca were as vague as they ever were.

    Tim said China assembly/factories are “ramping” after closures. Maybe I was exuberant but I heard a (maybe if all is ok) $4B hit rather than if it doesn’t (but it’s looking ok) $8B.

    I will relisten, as I was exuberant with the results and bias may have been at play.. The 3rd best quarter!

    3
    April 28, 2022
  9. David Drinkwater said:
    “Traders and their algos were reportedly freaked out by management’s warning that the headwinds from COVID shutdowns and silicon shortages in the “Shanghai corridor” would be stronger in Q3 than they were in Q2 — setting quarterly revenues back somewhere between $4 and $8 billion.”

    This is just stupid fearmongering and an attempt to set up a reason to panic in July in response to something that happens (almost) *every year* with Apple: Q1 stomps it, Q2 calms down a bit, Q3 is a lull, and Q4 picks it back up with new device sales in September. i.e. Q3 almost always drops by $4-10 billion from Q2.

    2020 was an exception because the buzz-phrases of the Quarter were “shelter in place” and “social distancing”.

    4
    April 28, 2022
    • Robert Paul Leitao said:
      David: The issue isn’t supply constraints reducing revenue by $4 billion to $8 billion in the June quarter. The issue is management does not have a revenue guide and if management doesn’t have a revenue guide how do they know the impact of constrained supplies? We are already a month into the quarter! Management would not even respond to the “soft lobbed” question as to whether or not revenue in the June quarter would be above or below last year’s level coming off a revenue gain of just under 9% in the March quarter. That’s the issue, not the reality of constrained supplies. We’ve dealt with constrained supplies before. I don’t recall management ever claiming not to know where revenue might be in relation to the prior year quarter a month into the current quarter. Revenue was down YOY in the March quarter in Rest of Asia Pacific and Japan, up only $615 million in Greater China, up about 4.6% in Europe and up about 19.1% in the Americas. There’s much more to the story.

      1
      April 28, 2022
  10. bas flik said:
    in the end its about demand. covid constraints are temporary setbacks.

    4
    April 28, 2022
    • Robert Paul Leitao said:
      Bas: OpEx rose by nearly 20% to $12.50 billion. Consequently, net income growth at the rate of 5.84% was below the rate of growth in revenue. Revenue growth was at 8.59% was greater than the rate of eps growth at 8.57% which is remarkable considering the tens of billions of dollars deployed for repurchases over the past 12 months. The company has some near-term challenges. That happens. I don’t recall such vague answers from management before during a conference call with analysts.

      1
      April 28, 2022
      • David Drinkwater said:
        Vague answers usually point to evasion of concrete answer, which means the company does not like the concrete answers. That’s pretty clear.

        As to the increase in OpEx, that could possibly be a good thing in preparation for Q3 or Q4 to prepare for new and or different capacities. It does somewhat depend on where Apple accounts for the dollars. To be fair, though, standing up new factories should probably be CapEx.

        My takeaway, after some consideration is that a $90 billion boost to buy-back means that Apple still thinks AAPL is cheap.

        That should be encouraging.

        How Apple can continue to make more money than it returns to investors as it attempts to get to cash-neutral really confuses me.

        2
        April 28, 2022
        • Robert Paul Leitao said:
          David: I agree. $90 billion in additional repurchases is a clear sign management considers the current valuation to be low. As for the cash distribution in the form of buybacks and dividends, Apple’s net cash position at the end of the March quarter at $73 billion is lower than the December quarter’s ending net cash position of $80 billion. For the next 12 months, Apple’s $90 billion deployment for repurchases, plus the remaining dollars from last year’s authorization and the slightly higher dividend per share and continued net share settlements (coming in at around $23 billion – $25 billion combined) is likely to move the net cash position lower than the recent March quarter’s $73 billion net cash position. The company is making progress getting to net cash neutral, but it will take time.

          0
          April 29, 2022
          • Bob Goldstein said:
            Robert, what does being cash neutral mean to shareholders? Thanks

            0
            April 29, 2022
  11. Troy Thoman said:
    I think the demand slowdown in China will happen this quarter too… so I think the supply and demand may actually balance in this Q.

    1
    April 28, 2022
  12. Troy Thoman said:
    I also saw a bunch of long-term good news. $90B of share repurchases, 50% of Mac purchases were new to Mac, services continued to grow well (slowing growth of a $20B/Q piece of a business is still huge), and I believe will continue to do so.

    3
    April 28, 2022
  13. T R said:
    Anxiety: Demand is not a problem, but supply. 12 month = $250.

    2
    April 28, 2022
  14. Daniel Epstein said:
    I think the supply constraints number should not be as much of a concern to investors as it apparently is. Apple usually has implied that they would have had that many more sales if they could have built and or deliver the product without constraint. In the record 1st quarter that would have meant an even bigger record. Same with the 2nd Qtr. Given Apple’s current size and revenues even in this upcoming quarter it is much smaller than the amount of money they would spend on buybacks. If they were really worried about it they could have announced a smaller buyback. More of an indication of how much better the company could be doing.

    3
    April 28, 2022
  15. T R said:
    Link awaiting moderation, but “This was a Tom Brady-like quarter for Apple, says Wedbush Securities Dan Ives”

    0
    April 28, 2022
    • Robert Paul Leitao said:
      TR: I’m looking forward to the link. Thank you. I’d like to read what Dan has to say and how that compares to the way I view the conference call.

      0
      April 29, 2022
  16. T R said:
    Apple employee retention: With RSUs, they accrue dividends for later payout. The share price (rolling 1-2-3 years) is the compensation spreadsheet they’re looking at. I suspect there is a meme that a share price increase is a solid bet, in 1-2-3 years.

    1
    April 28, 2022

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