Apple Q2 FY2022 Earnings Report Recap

AAPL beat on earnings and on revenue

Key Takeaways

  • Apple's services revenue was in line with analyst estimates.
  • Profit margins on the company's services revenue are much larger than on revenue generated through product sales.
  • Apple's board of directors approved increases to the company's dividend and its existing share buyback program.
Apple Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
EPS Beat $1.52 $1.43
Revenue Beat $97.3B $94.4B
Services Revenue Match  $19.8 $19.8B

Source: Predictions based on analysts' consensus from Visible Alpha

Apple (AAPL) Financial Results: Analysis

Apple Inc. (AAPL) reported Q2 FY 2022 earnings that exceeded analysts' expectations. Earnings per share (EPS) came in above expectations, up 8.6% from the year-ago quarter. Revenue also beat analyst forecasts, rising 8.6% year over year (YOY) to a record high for the March quarter. Apple's services revenue matched analysts' estimates.

The company's shares were up more than 2% in after-hours trading. Over the past year, Apple's shares have provided a total return of 23.2%, well above the S&P 500's total return of 0.0%.

Note that Apple's 2021 fiscal year (FY) ended in late September 2021. Its current earnings report is thus for its fiscal second quarter, which coincides with the first quarter of the calendar year.

AAPL Services Revenue

Apple's services revenue grew 17.3% YOY, marking the slowest pace of growth since the final quarter of FY 2020. The company's services include its digital content stores and streaming services, such as its various App Store platforms, Apple Music, Apple Arcade, Apple News+, Apple TV+, and Apple Fitness+. Apple also generates services revenue from AppleCare, advertising services, cloud services, and other services, including Apple Card and Apple Pay.

Profit margins on services sales are dramatically larger than on Apple's hardware profits. That means that each dollar of added service sales disproportionately boosts Apple's profits compared to hardware sales. Hardware sales still make up the majority of Apple's revenue, however. Services revenue accounted for about 20% of total revenue for the quarter.

AAPL Dividend and Share Buyback Increases

Apple's board of directors declared a cash dividend of $0.23 per share on common stock, reflecting an increase of 5%. The dividend is payable on May 12, 2022, to shareholders of record as of May 9, 2022.

Apple's board also approved an increase of $90 billion to the company's existing share repurchase program.

Apple's next earnings report (for Q3 FY 2022) is expected to be released on July 25, 2022.

Article Sources

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  1. Apple Inc. "Apple Reports Second Quarter Results."

  2. Apple Inc. "Q2 FY2022 Condensed Consolidated Statements of Operations (Unaudited)," Page 1.

  3. Visible Alpha. "Financial Data."

  4. TradingView. "Price Chart: AAPL and S&P 500."

  5. Apple Inc. "Form 10-K for the Fiscal Year Ended September 25, 2021," Page 2.

  6. Yahoo! Finance. "Earnings Calendar: AAPL."

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