Apple shares rise on record quarterly profit
Apple’s net profit increased 11.3 per cent yearon-year to a record $22.24 billion (Dh81.6bn) in the company's fiscal 2020 first quarter ended December 28, 2019, as earnings from iPhone and services surged.
This was the biggest quarterly profit for the Cupertinobased tech giant in history, beating analyst estimates and increasing the share price by 2.8 per cent and another 1.5 per cent in trading after-hours.
Sales of iPhone grew 7.6 per cent to $55.96bn in the three month period from the year earlier period. Strong sales in other parts of the business, such as services and wearables, meant the US technology company posted quarterly revenue of $91.82bn, almost $7.5bn more than the same period last year.
“We are thrilled to report Apple’s highest quarterly revenue ever, fuelled by strong demand for our iPhone 11 and iPhone 11 Pro models… and all-time records for services and wearables,” said Tim Cook, chief executive of Apple.
Launched in September, last year, the iPhone 11 was the company’s bestselling smartphone during the last three months of 2019, Mr Cook said.
The iPhone sales grew after falling in each of the previous four quarters. However, it still did not hit 2017’s record mark when the company sold $61bn worth of iPhones in the first quarter.
According to Apple, its global sales – outside the US market – accounted for nearly 55 per cent of the company's total first-quarter revenue.
The company gained some ground in the Greater China market (mainland China, Hong Kong and Taiwan), which has been a stronghold for the company in the past. Its input grew more than 3.1 per cent year-onyear in the first quarter of this year, contributing $13.58bn of total sales.
Analysts said a weaker Chinese economy was hitting Apple's bottom line. China's domestic market continues to be challenged as overall consumer spending on smartphones has fallen, said USbased International Data Corporation in one of its research notes. The world's second largest economy grew at the slowest pace in three decades last year.
Apple’s active installed base of devices grew in “each of our geographic segments and has now reached over 1.5 billion”, said Mr Cook, adding, “We see this as a powerful testament to the satisfaction, engagement and loyalty of our customers and a great driver of our growth across the board.”
Total revenue from services grew nearly 17 per cent to $12.72bn, while revenue from wearables, home and accessories products increased almost 37 per cent to more than $10bn.
The company’s iPad revenues dipped 11.1 per cent to $5.98bn while Mac sales were down 3.5 per cent.
“Our very strong business performance drove an all-time net income record of $22.2bn and generated operating cash flow of $30.5bn,” said Luca Maestri, the company’s chief financial officer.
Apple returned nearly $25bn to shareholders during the quarter, as the company maintained its target of “reaching a net cash neutral position over time”, he added.