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An Apple store in Bangkok.
Mladen Antonov / AFP via Getty Images
Apple
posted better-than-expected results for its first fiscal quarter, with customers purchasing iPhones, Macs, iPads and other Apple products at an impressive pace. Sales exceeded Wall Street expectations in all categories.
At the start of the quarter, Wall Street analysts’ expectations were driven in particular by the potential for an explosive quarter for iPhone sales, following the recent launch of the iPhone 12 line. And Apple (ticker: AAPL) delivered.
In a conference call with analysts, CEO Tim Cook said the company surpassed the total of 1.65 billion devices installed worldwide in the quarter, with the installed base of iPhone reaching 1 billion. He also said that the company had record revenue in all geographic areas.
Overall, Apple posted revenue of $ 111.4 billion, an increase of 21% over the previous year’s quarter, and earnings of $ 1.68 per share. This was well above the Street consensus of $ 102.8 billion and $ 1.40 per share.
Apple recorded iPhone revenue in the quarter of $ 65.6. billion, an increase of 17% over the previous year, well above the $ 59.6 billion Street consensus, as monitored by FactSet.
The three months ending December 31 were also strong for laptops and tables. For iPads, sales were $ 8.4 billion, a 41% increase, and ahead of Street, $ 7.4 billion. For Macs, which gained momentum with the arrival of the first models with Apple’s homemade M1 processor and with the continued increase in demand triggered by the tendency to stay at home, sales were $ 8.7 billion, an increase of 21% and slightly above the $ 8.6 billion Street forecast.
Wearable sales were also strong, growing 30% to $ 13 billion, ahead of Street by $ 11.5 billion. And service revenue jumped 24% to $ 15.7 billion, ahead of the Street consensus of $ 15.2 billion.
Sales grew 12% in the Americas, 17% in Europe and 57% in Greater China, with gains of 33% in Japan and 11.5% in the rest of Asia.
“Our business performance in the December quarter was driven by double-digit growth in each product category, which generated record revenues in each of our geographic segments and a historic record for our installed base of active devices,” said the CFO Luca Maestri in a statement. “These results helped us to generate a record operating cash flow of US $ 38.8 billion. We also returned over $ 30 billion to shareholders during the quarter, as we maintain our goal of achieving a neutral net cash position over time. “
The company said it repurchased $ 24.8 billion in shares in the quarter.
Apple did not provide financial forecasts at launch. For the seasonally milder quarter in March, Street’s consensus expectation is $ 74 billion in revenue and earnings of 90 cents per share.
Maestri said in the call that, given the ongoing uncertainty due to the pandemic, the company is again not providing details on the revenue and profit outlook. But the company said it expects revenue growth to accelerate year after year. He said the company expects some sequential slowdown in service growth, due to a difficult comparison the previous year, and also expects slower growth in wearables.
After an 82% hike in 2020, the stock added another 7% this year. The stock remains the world’s largest market capitalization company, with a valuation of just under $ 2.4 trillion.
The company ended the quarter with $ 196 billion in cash and bonds, offset by $ 112 billion in total debt, to net cash of $ 84 billion, the CFO said. He also recalled that the gross margin in the quarter rose to 39.8%, compared to 38.4% a year ago.
Write to Eric J. Savitz at [email protected]