Apple: EPS Increases 9% to $1.52 in Q2, but Supply Constraints, Antitrust Probe Weigh

Apple Inc. (AAPL) yesterday promulgated its long awaited quarterly financial report. The tech bluechip’s Q2 of fiscal 2022 diluted earnings per share stood at $1.52, up 9% from the same time frame the year prior.

Total net sales in the reporting period were $97.28 billion, marking a 9% increase YoY. Operating income for the three-month period ending March 26, 2022, grew 9% on an annual basis to $29.98 billion, while net income rose by 6% to $25 billion.

Revenue attributed to the iPhone came in at $50.57 billion, up from $47.9 billion in the year-ago period, due to strong demand for the iPhone 13 series. In its turn, Mac sales came in at $10.4 billion, while revenue attributed to the iPad and its Services division came in at $7.6 billion and $19.8 billion, respectively.

"We set an all-time revenue record for Services and March quarter revenue records for iPhone, Mac, and Wearables, Home and Accessories... 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," CFO Luca Maestri commented.

"The board of directors has also authorized an increase of $90 billion to the existing share repurchase program," the company also announced. Apple's stock rose by 2.08% in late trading after the release of the report.

But executives saw accelerating pressure and billions in additional costs from challenges in the current period, sending shares lower in after-hours trading. “Supply constraints caused by Covid-related disruptions and industry-wide silicon shortages are impacting our ability to meet customer demand for our products,” CEO Luca Maestri said on a conference call.

The company anticipates that it will see $4 billion to $8 billion in negative impacts related to the constraints in its Q2, which is “substantially larger” than what Apple experienced during its previous quarter.

Also, Apple will face new antitrust charges in Brussels next week because of how it prevents competitors from accessing its mobile payment system. According to the recent FT report, Apple would receive penalties valued at up to 10% of worldwide revenue if the charges were upheld. Brussels will charge the company with unfairly blocking access to its mobile wallet system to groups such as PayPal and major banks.