Apple CEO Tim Cook unveils the new iPhone 12.
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Apple delivered its largest quarter of all-time revenue at $ 111.4 billion on Wednesday in its first-quarter fiscal 2021 earnings report. This is the first time Apple has exceeded the $ 100 billion token mark in a single quarter, and sales increased by 21% year-on-year.
Apple shares fell about 1% in extended trading.
Apple’s results for the quarter, which ended in December, were not just driven by 5G iPhone sales. Sales for each product category increased by double-digit percentage points. Apple’s earnings per share and sales beat Wall Street expectations.
This is how Apple did against consensus Refinitiv estimates:
- VPA: $ 1.68 vs. $ 1.41 Estimated
- Income: $ 111.44 billion estimated at $ 103.28 billion, 21% higher than year-on-year
- iPhone revenue: $ 65.60 billion estimated at $ 59.80 billion, up 17% year-over-year
- Services revenue: $ 15.76 billion compared to $ 14.80 billion, up 24% year-over-year
- Revenue from other products: $ 12.97 billion compared to $ 11.96 billion, up 29% year-over-year
- Mac revenue: $ 8.68 billion against $ 8.69 billion, up 21% year-over-year
- iPad revenue: $ 8.44 billion versus $ 7.46 billion, which is 41% higher than year-on-year
- Gross margin: 39.8% compared to 38.0% estimated
Apple CEO Tim Cook said the results could have been even better had it not been for the Covid-19 pandemic and the closure that forced Apple to temporarily close some Apple stores around the world.
“If you take the stores out of the equation, especially for iPhones and wearables, there are fewer sales,” Cook told Josh Lipton, CNBC.
Apple has not provided official guidelines for the coming quarter. It offers no forecasts for investors since the start of the pandemic.
But even the lack of guidance could not reduce an outburst quarter for the iPhone maker. During the pandemic, Apple took advantage of increased sales of computers and devices because people who work from home or go to school because of connections want to upgrade the devices they use.
Apple introduced new iPhone models in October. The four iPhone 12 models are the first to include 5G, which investors say could drive a ‘superbike’ of users to upgrade. IPhone revenue increased by 17% compared to the same period last year.
“They’re full of features that customers love, and they came at exactly the right time, where 5G networks were,” Cook said.
Apple’s other product category, which includes Apple Watch and headphones such as AirPods and Beats, rose 29% from last year to $ 12.97 billion, even as people spend less time commuting and traveling. Apple released a high-end pair of headphones, AirPods Pro Max, in December with a steep price tag of $ 549.
Macs and iPads, the Apple devices most likely to be used for telecommuting and school, were also in this quarter. In December, Apple released new Macs powered by their own chips instead of Intel processors with positive reviews saying it was better than the old models in terms of power and battery life.
Apple’s service business, which highlights the company as a growth engine, rose 24% year-on-year to $ 15.76 billion. The product category is the best: it includes the money Apple earns from the App Store, subscriptions to digital content such as Apple Music or Apple TV +, license fees paid by Google to be the iPhone’s standard search engine, and warranties.
In its release, Apple emphasized that international sales account for 64% of the company’s sales, compared to 61% in the same quarter last year. The question of how investors are doing with the new iPhone models in China, China’s third largest market.
“China has been strong across the board,” Cook said.
Apple also declared a cash dividend of $ 0.205 cents per share, saying it spent more than $ 30 billion on shareholders’ total returns during the quarter, including share repurchases.
Apple’s first fiscal quarter is usually the largest of the year and includes critical holiday sales during December.
Wednesday’s blowout earnings are also a story for Apple. Two years ago, Apple warned that its forecast for its holiday quarterly sales was lower than the company expected, a rare warning that raised the question of whether Apple would lose its momentum. Apple revealed on Wednesday that revenue has risen more than 40% since the report.