Apple

Apple   released a robust set of results for the first quarter of 2022, disproving   analysts and consensus forecasts which were proven to be way off course, with   strong beats on both revenue and profit.

Revenue grew of 11% year-on-year, operating cash flows were up $8bn,   and free cash flow (FCF) escalated by 25% to $44bn. Cash on the balance sheet   increased by $14bn, in spite of substantial share buy backs.

Revenue for the quarter came in at $123.9bn, resulting in net income   growth of 20% and EPS increasing by 25%. EPS came in at $2.10 vs estimates of   $1.89, an increase of 11% in a challenging operating environment with global   supply chain issues resulting in a shortage of microchips, and an inability   to fully satisfy demand for the product.

However, management expects supply chain issues to ease in the next   quarter ended March 2022, which should enable Apple to expand profit margins   on the back of increases in sales volumes. This will result in an escalation   in revenue growth.

Apple segmental results were driven by better-than-expected revenue   growth in iphone, Mac, Services and Wearables Home and Accessories. However,   ipad sales fell below estimates as supply chain disruptions impacted on   product availability.

IPhone revenue of $71,6bn was up only 9%, again due to supply   constraints. Mac revenue of $3.9bn was up 25%, above expectations as were   services revenue, up 24%. Mac, a high gross margin operation should be a   driver of future growth for group profits.

Apple did not provide explicit revenue guidance for the next   quarter, however, it expects to grow revenue year on year to record levels.   Apple shares are the largest single share investment in the Berkshire   Hathaway portfolio, having been a sterling performer for the fund over the   long term.

The company is expected to announce the rollout of innovative new   products, as well as new iphones and Mac devices, in the second half of 2022   which should provide another leg for growth. I have been an investor in Apple   shares in managed portfolios, and remain a long term investor, despite the   high level of volatility associated with the IT sector currently.

Apple