Apple’s Blockbuster Quarter: Revenue Tops $100BN, Record China Sales, Beats Across The Board

Apple’s Blockbuster Quarter: Revenue Tops $100BN, Record China Sales, Beats Across The Board

On the back of disappointing earnings from Facebook and Netflix, AAPL stock dipped into its earnings release, but as the company’s stellar results just showed this may have been a bit premature, because Tim Cook’s company just reported blockbuster earnings including its first ever $100BN quarter, around in its iPhone 12 release quarter.

Here are the details:

  • Q1 Rev. $111.44B, beating expectations of $103.12B, and up 21%from $91.8 billion Y/Y. This, as expected, was the company’s first ever $100BN+ quarter.
  • Q1 EPS $1.68, beating expectations of $1.42, and up 35% Y/Y
  • Q1 iPhone Revenue $65.60B, beating expectations of $60.33B
  • Q1 Products Rev. $95.68B, beating expectations of $88.21B

Some more details from the quarter:

  • Q1 Wearables, Home & Accessories $12.97B, Est. $11.84B
  • Q1 Mac Revenue $8.68B, Est. $8.86B
  • Q1 iPad Revenue $8.44B, Est. $7.57B

Of note: Mac sales were strong yet not strong enough to beat estimates despite soaring laptop sales which have surged during work and study from home. As Bloomberg notes, “there might be a bit of disappointment with that one.”

On the positive side, the Wearables, Home and Accessories boost is due to major updates in that line, including two new Apple Watch models, the AirPods Max headphones, and the HomePod mini. Apple went all out on accessories this past quarter

One potential negative: even in the company’s record quarter – the one where the iPhone 12 was introduced – the company still can’t meet its iPhone sales hit back in 2016-2017, confirming that Apple’s iphone is no longer the must have accessory it once was.

This may explain why as Walter Piecyk notes, “that’s the first time $AAPL R&D/revenue has dropped y/y since the June quarter in 2015, the year of the iPhone 6.”

The closely watched Services soared to $15.76BN, beating expectations of $14.89B…

… and up 23.9% from the $12.7BN a year ago.

Also remakrable was the surge in Chinese revenues, which soared by a whopping 57% Y/Y…

… to a record $21.31BN from $13.6Bn a year ago.

Commenting on the quarter, Tim Cook said that “this quarter for Apple wouldn’t have been possible without the tireless and innovative work of every Apple team member worldwide. We’re gratified by the enthusiastic customer response to the unmatched line of cutting-edge products that we delivered across a historic holiday season. We are also focused on how we can help the communities we’re a part of build back strongly and equitably, through efforts like our Racial Equity and Justice Initiative as well as our multi-year commitment to invest $350 billion throughout the United States.”

Luca Maestri, Apple’s CFO, also chimed in saying that the “December quarter business performance was fueled by double-digit growth in each product category, which drove all-time revenue records in each of our geographic segments and an all-time high for our installed base of active devices. These results helped us generate record operating cash flow of $38.8 billion. We also returned over $30 billion to shareholders during the quarter as we maintain our target of reaching a net cash neutral position over time.”

And in keeping with this, Apple’s Board of Directors has declared a cash dividend of $0.205 per share of the Company’s common stock. The dividend is payable on February 11, 2021 to shareholders of record as of the close of business on February 8, 2021.

Perhaps indicative of just how priced to perfection Apple was, however, the stock has barely budged and after some initial kneejerk moves both lower and higher, it was virtually unchanged from the close.

Indeed, as Bloomberg explains the lack of reaction, “expectations had been sky high for the company on suggestions of a new iPhone “super cycle,” spurring a stock surge in recent months. Apple also recently introduced other new devices, including an updated Apple Watch, and demand increased for iPads, Mac computers and services from consumers working and studying from home during the pandemic.”

So yes – amazing quarter, but not that amazing to push the stock to a new permanent plateau.

Tyler Durden
Wed, 01/27/2021 – 16:45

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Author: Tyler Durden