By Stephen Nellis
(Reuters) – Apple Inc. on Wednesday reported sales and profit for the holiday quarter beating Wall Street expectations as new 5G iPhones helped boost the device’s revenue to a new record and a rise of 57% in China’s sales.
Apple shipped its iPhone 12 series a few weeks later than usual, but an expanded number of models and a new look has fueled the demand for upgrades, especially in China. The company also saw strong sales of its Mac laptops and iPads during the quarter, driven by consumers working, learning and playing during the pandemic.
Apple’s revenue for the quarter ended Dec. 26 rose 21% to $ 111.44 billion. Earnings per share rose to $ 1.68 from $ 1.25, beating Wall Street targets, according to IBF data from Refinitiv. IPhones sales were $ 65.60 billion and reached a record three years ago. (Graphics: https://tmsnrt.rs/3prAlRd)
CFO Luca Maestri told investors that revenue growth in the current fiscal second quarter is likely to accelerate on a year-on-year basis and that gross margins are likely to be similar to the first quarter fiscal rate of 39 , 7%. He also said that the revenue of the company’s segment was facing a difficult comparison with the year before, when the pandemic increased sales, and that the growth in the company’s portable segment year-on-year slow down.
Shares of Apple fell 2.6% to $ 138.33 after the report, but have risen nearly 12% since January 15. Apple shares rose 85% year-on-year to 46% for the Nasdaq 100, of which it is a component.
“Their challenge is to maintain the success to justify the now premium valuation,” said Trip Miller, managing partner of Apple investor Gullane Capital Partners.
Apple, the largest U.S. $ 2.4 billion publicly traded company, thrived on a pandemic that forced it to close many of its stores but prompted many consumers to buy or upgrade devices.
Apple CEO Tim Cook told Reuters in an interview that the company now has an active installed base of 1.65 billion devices, compared to 1.5 billion devices a year ago. Cook also said Apple now has an installed base of more than 1 billion iPhones, an increase over the 900 million the company recently announced in 2019.
China was a strong market for iPhone, with overall sales there up 57% to $ 21.31 billion.
“We have sold two of the top three smartphones in urban China,” Cook told Reuters in an interview, adding that “upgraders in particular have set a record in China.”
Mac sales reached expectations of $ 8.68 billion. The sales of iPads, services and portable Wall Street targets. IPad revenue was $ 8.44 billion and the service business, which includes its new Apple One package of television, music and cloud storage services, had revenue of $ 15.76 billion.
Cook told Reuters that sales of Macs, iPads and the iPhone 12 Pro model had “supply constraints”. He said that ‘semiconductors are very strict’, but that other parts of the supply chain also contribute to the constraints.
Apple has 620 million paying subscribers on its platform, above the target of having 600 million subscribers by the end of 2020, Cook said.
The service segment also includes sales of Apple’s App Store, whose billing practices have become a flashpoint of conflict with “Fortnite” creator Epic Games, and whose privacy rules are a public ghost with Facebook Inc.
Apple’s portable and accessory segment, which includes the Apple Watch and AirPods product lines, generated $ 12.97 billion in revenue. Apple released the AirPods Max in December, a $ 550 wireless headset with delivery dates within hours of launching the product. Cook said the shortage of AirPods Max could continue into the current fiscal second quarter.
(Graphics: https://tmsnrt.rs/2Mwb7Tr)
(Reporting by Stephen Nellis in San Francisco; Additional Reporting by Subrat Patnaik in Bengaluru; Editing by Lisa Shumaker and Peter Henderson)