Apple’s iPhone 12 may have delivered a record $ 100 billion quarter

In all, the Cupertino, Calif., Company may have generated more than $ 100 billion in quarterly sales for the first time. On Wednesday, Apple is due to release results for the three months ending December, its first fiscal quarter. Analysts surveyed by FactSet expect earnings to have increased 8% to $ 24 billion and earnings per share to $ 1.41.

Results come during the biggest corporate earnings week this quarter and the same day Tesla Inc.

and Facebook Inc.

they must also record record profits. Investors will be looking for signs from Apple CEO Tim Cook, Tesla CEO Elon Musk and Facebook CEO Mark Zuckerberg that technology stocks may continue to drive record growth in the S&P 500.

Apple’s stock rose 81% in 2020 and rose about 8% this year through Tuesday in investor enthusiasm for its latest iPhone and high spending on its consumer products that work, go to school and seek entertainment while are stuck at home. It is one of several technology companies whose outstanding performance contrasts with the millions of unemployed Americans in the midst of the global pandemic.

The holiday quarter is always a closely watched period for Apple, representing about 30% of its annual sales. This time, however, it gains greater emphasis with the arrival of the iPhone 12 that some analysts and investors were betting that would trigger a record boom similar to when the first big-screen iPhone was launched in 2014. This bet, however, was questioned with the spread of the coronavirus last year.

The initial outbreak in China delayed the production of the flagship phone and postponed its launch until October of its typical debut in September. Some versions of the new phone did not start shipping to customers until November, reducing the number of weeks Apple typically has in the period to capture sales before Christmas.

These delays created some uncertainty about the intensity of the period that Apple could report. “There is a school of thought that, because of the delayed launch and some supply restrictions, iPhone units may be down,” said Mark Stoeckle, chief executive of Adams Funds, which has Apple among its biggest stakes. “While we see this as a possibility, what we strongly believe is that the iPhone 12 will be very successful in 2021.”

Katy Huberty, an analyst at Morgan Stanley, is among the most optimistic, calling the iPhone launch a note to investors last week of “Apple’s most successful product launch in the past five years.”

Despite the delay, analysts forecast, on average, that revenue rose 12%, to $ 102.8 billion, compared to the previous year. Although Apple is no longer reporting unit sales, analysts say the revenue was probably helped by demand for more sophisticated models of the new smartphone.

For the iPhone 12, Apple launched four versions of the line, including a new mini version with a starting price of $ 699, which was the same cost as the previous year’s largest iPhone 11. The comparable size of the iPhone 12 costs about $ 100 more than its predecessor, and the largest and most expensive iPhone 12 Max costs $ 1,099.

In the United States, the average retail price of the iPhone rose to $ 873 from $ 809 a year ago, driven by buyers gravitating to more expensive versions, according to a customer survey by Consumer Intelligence Research Partners LLC. Price improvements follow a trend by Cook to increase the average selling price of iPhones, extracting more profit from devices, as unit sales fell from a peak of 231 million in fiscal 2015.

IPhone revenue may have increased by 6.3% to $ 59.5 billion in the last quarter, according to analysts. This growth may slow when compared to other parts of Apple’s business, which helped boost its bottom line last year amid falling iPhone sales. Analysts predict a 21% increase in sales for the Mac line and 23% for iPads. Another closely watched metric will be the results of Apple’s services business, which has taken on increasing importance in recent years.

On Wednesday, investors are looking for signs that the new iPhone has legs. Analysts predict that sales will increase to $ 74 billion in the current quarter, almost 30% more compared to the previous year. Typically, a closely watched part of Apple’s quarterly reports is its sales orientation, but those forecasts were dropped last year amid uncertainty surrounding Covid-19. Apple did not say when it could return to such disclosures.

The potential for the October to December quarter has long excited analysts and investors who bet that pent-up demand for a technologically enhanced iPhone would spur an increase in purchases. The latest iPhone has the ability to access the latest generation cellular network, called 5G, which promises greater internet speed.

Cellular operators used the arrival of an iPhone 5G to try to win new customers. But it is not clear whether this is happening. Verizon Communications Inc.,

the largest US cell phone operator, released fourth quarter results on Tuesday that showed fewer new customers than analysts had expected. Even so, executives said they remain optimistic about next year.

The lack of new killer programs to take advantage of 5G speed and a limited network has raised doubts among some analysts about the real interest of the feature as a selling point for the new expensive phones.

Of the iPhone buyers in the Consumer Intelligence survey, only seven mentioned 5G. Most said they were motivated to buy the new iPhone because of problems with the previous phone or general update reasons.

(Dow Jones & Co., publisher of The Wall Street Journal, has a commercial contract to deliver news through Apple services.)

Write to Tim Higgins at [email protected]