Resurgent iPhone helps Apple eclipse projections
— Apple is still reaping huge profits from the iPhone while mining more moneymaking opportunities from the growing popularity of its smartwatch, digital services and wireless earbuds.
That combination produced a banner season for a company whose fortunes appeared to be sliding just a year ago amid declining sales for the iPhone, its marquee product for the past decade.
Apple’s fiscal first-quarter results, released this week, provided the latest proof that the fears hanging over the consumer electronics icon might have been unfounded.
Apple’s profit and revenue for the October-December period topped analysts’ projections, providing another boost to a stock that has more than doubled in less than 13 months.
The shares surged more than 2% to $325.33 in extended trading after the numbers came out. That’s up from $142 in January 2019 after Apple warned that consumers weren’t buying as many new iPhones as they once were, especially in China, the company’s biggest market outside the U.S. and Europe.
The stock was poised to mark an all-time high and further cement Apple’s position as the most valuable company in the U.S., with a market value of $1.4 trillion.
A deadly viral outbreak in China, which has curtailed travel and threatens the world economy, looms as a potential concern for Apple, but investors for now are focusing on what looks like an even more prosperous road ahead for a company that turned a $55 billion profit in its past fiscal year.
Apple got off to a fast start for fiscal 2020, with a first-quarter profit of $22.2 billion, or $4.99 per share, on revenue of $91.8 billion. Analysts polled by Fact Set had predicted earnings of $4.54 per share on revenue of $88.5 billion.
As usual, the iPhone remained Apple’s marquee attraction. Boosted by the release of the iPhone 11 heading into the holiday season, the product generated sales of $56 billion, an 8% increase from the previous year’s disappointing showing.
Besides rolling out high-end phones with more cameras and a starting price of $1,000, Apple sold a more basic model starting at $700 — a $50 drop from a comparable version released in 2018.
Apple’s division that includes its app store, product warranties, music streaming and a new Netflix-like video service delivered revenue of $12.7 billion, up 17% from the previous year. Apple is hoping its service division will produce revenue of at least $50 billion this year, doubling its output in just four years.
The services division is feeding into all iPhones, iPads, Macs and other Apple products already being used, which the company said Tuesday now totals 1.5 billion devices, up by 100 million from the previous year.