In Q3 of fiscal 2022 (which ended on June 25), Apple beat Wall Street expectations. Despite a $10 million miss on revenue, earnings per share came in at $1.20 (beating analysts’ consensus of $1.16), and revenue was $82.96 billion (vs. $82.97 billion).

It has been a good year for Apple. Stocks have rallied in recent months and are now down just 13% in 2022, not bad for a bear market. In recent weeks, other tech giants have predicted that consumer electronics (including smartphones) will cool off significantly in the second half of this year.

In some areas, Apple is feeling the impact too, but its flagship iPhone segment appears to be beating the trend.

What’s going on?

Considering the issues Apple has faced around the world, Apple’s overall results were impressive. The supply chain is in a mess (particularly with regards to chip shortages) and is restricting the supply of some devices.

Additionally, a strong U.S. dollar reduces international revenue, Apple no longer does business in Russia, and ongoing COVID-19 lockdowns (like in Asia) are reducing household discretionary spending.

Considering all this, the overall revenue increase of 2% over last year isn’t too discouraging. Also, the company’s earnings per share declined 7.7% year over year as profit margins decreased.

Even though consumer demand for some product types is declining and ongoing supply chain issues are impacting the ability to deliver a finished product where demand is still strong, Apple acknowledged things could be better.

Its total user base grew last quarter, helping the company’s higher margin “services” business continue to expand even as device sales fell. Especially in emerging markets, where Apple has a very small presence now, the iPhone is a big hit.

Siri, what do I do?

Apple shareholders had a good Q3 overall. While the company’s financial outlook for the final months of its fiscal year 2022 wasn’t particularly exciting, there were some positive developments.

Compared to the 43.3% just reported, gross margins could fall to a range of 41.5% to 42.5%. Apple continues to buy back shares ($65 billion during the three months alone). As a result of this ongoing activity, lower profit margins and resulting earnings-per-share pressure should be mitigated.

Despite difficult times, Apple continues to produce solid financial results. You shouldn’t buy this stock if you are looking for fast-growing stocks. Apple stock, however, remains a great company to build a portfolio around if you want consistent returns.