Apple (AAPL) puts computing records, succeeds easily with estimates

Apple Inc. (AAPL) achieved record revenue in the quarter ended December 31, 2020, which is the first quarter of the company’s fiscal year 2021, beating analysts’ estimates as well as large year-on-year gains. Earnings per share (EPS) were $ 1.68, 19.1% better than the $ 1.41 consensus estimate and 34.4% higher than the $ 1.25 figure earned in the same period a year earlier .

Total revenue was $ 111.44 billion, concluding the $ 103.28 billion consensus estimate with 7.9% and an increase of 21.4% compared to the $ 91.82 billion amount that a discussed years ago. This is the first time that Apple has reported $ 100 billion or more in quarterly sales.

Broad based strength

Apple’s record performance was driven by a broad surge in revenue. “Our operating performance in December in the second quarter was driven by the growth in two products in each product category, which set all-time records in our geographic segments and had an all-time high for our installed active device base, said Luca Maestri. Apple’s chief financial officer (chief financial officer).

The revenue figures and increases per year-to-year-per-year category, together with the margins by which they beat (or missed) the estimates, were:

• iPhone: $ 65.60 billion, 17.2% higher, estimate by 9.7%
• Mac: $ 8.68 billion, 21.2% higher, estimate missed by 0.1%
• iPad: $ 8.44 billion, 41.1% higher, estimate at 13.1%
• Wearables, Home and Accessories: $ 12.97 billion, 29.6% higher, the estimate by 8.4%
• Services: $ 15.76 billion, 23.9% higher, 6.5% estimate

Quarterly revenue records were compiled in the categories iPhone, portable and services.

The income and the year-on-year percentage increases were according to the division of the region:

• America: $ 46.31 billion, up 11.9%
• Europe: $ 27.31 billion, 17.4% higher
• Greater China: $ 21.31 billion, 56.9% higher
• Japan: $ 8.29 billion, 33.3% higher
• Rest of the Pacific: $ 8.23 ​​billion, up 11.1%

Apple CEO Tim Cook believes the results could have been even more impressive had it not been for the fact that Apple Stores was shut down by COVID-19. As he told CNBC, “If you exclude the stores, especially for iPhones and wearables, there are fewer sales.” Cook also indicated that Apple’s total installed base for iPhones is more than 1 billion, compared to the previous data point of 900 million, while the total active installed base for all Apple products is now 1.65 billion.

Increased capital returns to shareholders

Apple returned $ 28.39 billion to shareholders in the first quarter of the 2021 financial year through repurchases and dividends, an increase of 17.1% over the same period last year. Apple’s operating cash flow of $ 38.76 billion was a quarterly record, with CFO Maestri indicating that “we maintain our goal of achieving a net cash-neutral position over time.”

Importance for investors

The broad revenue increases that Apple has reported are certainly an indication of strength. In fact, as mentioned above, CEO Tim Cook believes that certain categories of product sales could have been even larger, had it not been for the closure of Apple Stores in response to COVID-19.

An important question that has not been answered, however, is the extent to which COVID-19 closures have boosted sales to people who have been forced to work from home, or to spend more free time at home. It is possible that the events in 2020 resulted in one-off quantum leaps in the underlying drivers of Apple’s sales, to an extent that may not be repeatable in 2021.