Apple delivers blowout earnings
Market shrugs off iPhone delays
Apple Inc on Thursday delivered blowout quarterly results, reporting revenue gains across every category and in every geography as consumers working and learning from home during the COVID-19 pandemic turned to its products and services.
The report topped Wall Street expectations, with even long-overshadowed categories like iPads and Macs getting a boost. Shares rose as much as six per cent in extended trading after the results.
The fiscal third-quarter results, which included iPhone sales some $4 billion above analyst expectations, came on the same day that U.S. gross domestic product collapsed at a 32.9 per cent annualized rate last quarter, the nation’s worst economic performance since the Great Depression.
Apple chief financial officer Luca Maestri also confirmed supply chain rumblings that the new lineup of iPhones, usually released in late September, would face delays of a few weeks.
But executives predicted continued strong performance from the company’s products.
Other major tech companies Amazon.com Inc and Facebook Inc also posted results that topped Wall Street targets, sending their shares up.
With 60 per cent of sales coming from international markets, the Cupertino, California-based company posted iPhone revenues of $26.42 billion, $4 billion above analyst expectations, according to IBES data from Refinitiv.
In an interview with Reuters, CEO Tim Cook said that after disruptions in April, sales began to pick back up in May and June, helped by what he called a “strong” launch for the $399 iPhone SE introduced in April.
“I think the economic stimulus that was in place – and I’m not just focused on the U.S., but more broadly – was a help,” Cook told Reuters.
The continued growth in services and accessories also showed the durability of the company’s brand, which has prompted investors to view it as a comparative safe haven and pushed up share prices since March.
The company saw strong sales in its greater China region, where aggressive pricing during a June holiday shopping season and lower-priced iPhone SE model released in April helped boost sales two per cent to $9.33 billion.
“China remains a key ingredient in Apple’s recipe for success as we estimate roughly 20 per cent of iPhone upgrades will be coming from this region over the coming year,” Daniel Ives of Wedbush Securities said in a note.
Apple also announced a 4-for-1 stock split, saying it wanted to keep shares accessible to a broad range of investors. Shares soared past $400 for the first time Thursday, though they had been proportionally higher before a 7-for-1 split in 2014.