Apple Inc. shares fell more than 3% in long-term trading after a cautious outlook for executives overshadowed quarterly revenue, which for the first time exceeded $ 100 billion.
Although the company did not provide an official forecast for the fourth consecutive quarter, executives say sales growth of AirPods and other portable materials will decline in the current quarter. They also warned that sales of services in the period would be tougher compared to a year earlier.
“It was an extremely strong term. What probably weighs on the stock at the moment is that they did not provide guidance, ” says Shannon Cross of Cross-Research.
Sales rose 21% to $ 111.4 billion in the period to Dec. 26, the company said Wednesday. statement. Analysts expected an average of $ 103.1 billion, according to data compiled by Bloomberg. Earnings were $ 1.68 per share, surpassing Wall Street estimates.
Expectations were high for Apple on proposals for a new iPhone ‘super-cycle’, where millions of existing users are upgrading outdated devices. The company also recently introduced other new devices, including an updated Apple Watch, and demand has increased for iPads, Macs, and services of consumers working and studying at home during the pandemic. The stock has jumped more than 20% over the past three months and was $ 142.06 in New York.
Revenue was driven by the iPhone 12, the first iPhone line to include four new models and 5G features. Device sales were $ 65.6 billion, easily surpassing the $ 60.3 billion Wall Street estimate. Consumers were attracted by 5G capabilities, especially in China, and the upgraded camera features of the Pro models.
“This strength in iPhone sales provides evidence for Apple bulls that another iPhone supercycle may be on the cards,” said Dan Morgan, a senior portfolio manager at Synovus Trust Company. The last super cycle took place with the iPhone 6 in 2014 and since then a “feeling more like ripples versus a wave, ‘he added.
During a phone conversation with analysts, Tim Cook and CFO Luca Maestri were confident about the iPhone business. They said that the more expensive iPhone 12 Pro and iPhone 12 Pro Max models with better cameras sold particularly well. The executives also highlighted strong sales in China, saying there was a yielding demand for iPhones with 5G capabilities.
Apple also said the number of active devices in the first fiscal quarter was 1.65 billion higher, which includes more than 1 billion active iPhone users. Cook added that during the period, Apple saw the largest number of upgrades ever noticed that switching from other smartphones was also strong.
In addition to the iPhone, Apple reported $ 8.44 billion in iPad sales, and $ 7.58 billion in forecasts. The company unveiled a redesigned iPad Air and a faster entry-level model during the quarter. Mac sales were $ 8.68 billion, and the estimate of $ 8.86 billion is missing. This is despite Apple launching a new MacBook Pro, Mac mini and MacBook Air during the quarter.
‘They probably had limited supply during the quarter. There are still major delays in shipping for some models, ”said Cross.
The influx of new hardware purchases has also led to strong growth in the service segment, which includes the App Store, iTunes, Apple Music and iCloud. The company reported $ 15.8 billion in services during the quarter, which is the best estimate of $ 14.9 billion.
The company highlights strong growth for iCloud subscriptions, Apple Music and the App Store, but does not provide details on the performance of TV +, its new video streaming service. The company recently extended free trials of TV + by a few more months.
Apple unveiled four key new products in the Wearables, Home and Accessories segment this quarter: the Apple Watch Series 6, Apple Watch SE, the HomePod mini speaker and AirPods Max headphones. Those devices gave Apple its strongest quarter to date for that segment with revenue of $ 12.97 billion. Analysts have estimated $ 11.84 billion.
Apple has seen significant growth in all major geographic areas, including Greater China, where sales rose to $ 21.3 billion from $ 13.6 billion a year ago. The company reported revenue of $ 46.3 billion in the Americas region, an increase of approximately $ 5 billion compared to the previous year.
(Updates with CEO, CFO, comment on more expensive iPhones in ninth paragraph.)