In addition, Huberty noted that vendor non-trade receivables and inventory growth were above seasonability, but that should change as the supply chain continues to get better. D&A as % of revs), which we believe is structural in nature given Apple's efforts to accelerate the in-sourcing of key components such as processors, sensors, displays, batteries, and cameras.' what would be implied by the trailing 3 year avg. The decline in D&A as a % of revenue has led to an average of 130 bps of gross margin upside over the past 4 quarters (vs.

'But as Apple increasingly brings more technology development in-house, D&A as a percentage of revenue is declining, while R&D expense has increased to 5.1% of revenue (vs. 'Historically, Apple funded capital equipment purchases for supply chain partners, which was a primary driver of D&A growing from $317M pre-iPhone launch in FY07 to $11.3B in FY21, as this equipment was depreciated over time,' Huberty wrote. With depreciation and amortization potentially being 'structurally lower,' gross margins could remain 'structurally higher,' going forward, Huberty added.Īpple ( AAPL) shares were down nearly 1% to $173.13 in early Tuesday trading. On a normalized basis, gross margins rose 3.3% year-over-year after a 4% increase in reported gross margins. Morgan Stanley analyst Katy Huberty, who raised her price target to $210 following the results, wrote in a note to investors that gross margins in the December quarter were 43.4%, even after a 0.4% positive impact from warranty accruals. PierreOlivierClementMantion/iStock Editorial via Getty ImagesĪpple (NASDAQ: AAPL) posted strong first-quarter results last week that handily beat Wall Street estimates, but the company's 10-Q showed that gross margin expansion and easing supply chain issues are coming.

Gross beat for mac