Apple Posts Double-Digit Revenue Growth in Mexico

Despite the strong dollar, Apple said it saw strong performance in several markets outside the US, in Mexico as well as in India, Indonesia and Vietnam

"In US dollars, we saw very strong double-digit growth in India, Indonesia, Mexico and Vietnam," said Apple CFO Luca Maestri.
October 27, 2022 | 07:41 PM

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Bloomberg Línea — Apple Inc. (AAPL) released its quarterly results on Thursday and saw strong performance in several markets outside the US, namely Mexico, where it enjoyed double-digit growth, despite the strong US dollar resulting in product price increases in international markets.

The company posted a September quarter record revenue of $90.1 billion, up 8% year over year, and quarterly earnings per diluted share of $1.29, up 4% year over year. Annual revenue was $394.3 billion, up 8% year over year, and annual earnings per diluted share were $6.11, up 9%.

“This quarter’s results reflect Apple’s commitment to our customers, to the pursuit of innovation, and to leaving the world better than we found it,” said Tim Cook, Apple’s CEO.

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The company did not provide a breakdown of sales per market, and only regionally. Net sales in the Americas during the quarter were $38.9 billion, up from $36.8 billion in the same quarter of last year.

In the previous quarter, Cook had already mentioned the big tech’s strength in emerging markets and that in Brazil the company also had “double-digit growth”. In the fourth fiscal quarter, Apple’s revenue grew 8.1% to about $90.1 billion.

The strong dollar has taken a toll on the results of the big US technology companies in recent quarters. To protect itself from currency pressures, Apple said it opts to enter into currency hedge contracts, where the company agrees in advance on a predetermined future value for the currency derivative and a term.

It’s a strategy that the Cupertino-based company has executed since 2014, when the contracts helped lessen the impact of the dollar against its profits, particularly in emerging markets.

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“Obviously, it’s a significant factor. We try to hedge exposures as we did in China, but there may be smaller currencies where we don’t hedge because the cost is prohibitive or the market is not there. But in general we hedge because it gives us a significant margin stability,” Apple CFO Luca Maestri said in a conference call with investors on Thursday night.

However, Maestri said that over time this protection is reduced because the contract is finalized and the company needs to buy new contracts. But that is one of the main tools Apple uses to reduce pressure on the exchange rate.

“Of course when we launch new products we look at the exchange rate situation and, in some cases, customers in international markets have to go through that price increase. Unfortunately, that is the situation we have now with the strong dollar,” Maestri said.

Apple has launched new products, in particular a new iPhone model, recently. In Mexico, the iPhone 14 costs 20,999 pesos ($1,059). In Brazil, it costs 7,600 reais ($1,423).

“In dollars, we saw very strong double-digit growth in India, Indonesia, Mexico, and Vietnam. In local currency, those growth rates were even higher,” said the CFO.

According to Maestri, it is important for Apple to see the performance of these markets in local currency because it gives the company a sense of how consumers are responding and engaging with the products and the strength of the brand.

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