Apple reported its earnings on July 28, posting a record revenue of $83 billion for the third quarter — led by iPhone revenue of $40.67 billion — which represents an uptick of 2% year-over-year despite inflation, beating analysts’ expectations.

                By                    Yaёl Bizouati-Kennedy

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The revenue figures were “better than expected despite supply constraints, strong foreign exchange headwinds, and the impact of our business in Russia,” Tim Cook said in an earnings call, according to a transcript.

Apple stock was up 2.9% during mid-day trading on July 29 and is down 11% year-to-date.

“Our June quarter results continued to demonstrate our ability to manage our business effectively despite the challenging operating environment. We set a June quarter revenue record and our installed base of active devices reached an all-time high in every geographic segment and product category,” Luca Maestri, Apple’s CFO, said in the earnings release. “During the quarter, we generated nearly $23 billion in operating cash flow, returned over $28 billion to our shareholders, and continued to invest in our long-term growth plans.”

Wedbush Securities analyst Dan Ives views revenue of $14.6 billion from “the all-important China region” — down just 1% year-over-year despite the nation’s pandemic shutdowns — as a “‘Top Gun’ Maverick-like feat for Cook and company, and speaks to the overall demand story seen with Apple.”

Ives added that following the conference call and the results, Wedbush is positive Apple can navigate this economic storm “with the demand and growth story well intact for the growth pillars of iPhones and Services front and center.”

“Looking ahead, we believe the key to Apple’s success over the next 6-12 months will be the company’s ability to capitalize on the iPhone upgrade cycle while staying on track for the fall of 2022. With China issues and supply chain as a ‘peak issue’ in the rear view mirror for now, Cook and company laser focus their sights on the iPhone 14 production/demand cycle for the September launch of this next key iPhone model. We estimate roughly 225 million Apple customers have not upgraded their iPhones in 3.5 years, creating a strong pent-up demand story with iPhone 14 despite the darkening global macro backdrop,” he said.

Wedbush reiterated its Outperform rating on the stock, with a $200 price target.

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CFRA senior industry analyst Angelo Zino wrote that “we remain optimistic about secular growth opportunities tied to Services (e.g. advertising, gaming, and bundling), while hardware sales prove resilient/stable as the installed base grows.”

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