Tags: Financial Markets | apple | revenue | earnings | wall street | iphone 12 | super cycle

Apple Revenue Tops $100B for First Time on iPhone Sales

an apple iphone 12 ad on a store front as a masked man walks by
(Budrul Chukrut/AP)

Wednesday, 27 January 2021 06:18 PM

Apple Inc. shares fell after a cautious outlook from executives overshadowed quarterly revenue that topped $100 billion for the first time. Shares of the company declined more than 2% in extended trading.

Apple also did not provide a revenue forecast for the fourth quarter in a row. It previously cited uncertainty from the COVID-19 pandemic in choosing not to provide projections.

"It was an extremely strong quarter," Shannon Cross of Cross Research said. "What's likely weighing on the stock at the moment is that they didn't give guidance."

Sales jumped 21% to $111.4 billion in the period ended Dec. 26, the company said in a statement. Analysts, on average, expected $103.1 billion, according to data compiled by Bloomberg. Profit was $1.68 a share, also topping Wall Street estimates.

Expectations have been sky high for the company on suggestions of a new iPhone "super cycle," where millions of existing users upgrade aging handsets. The company also recently introduced other new devices, including an updated Apple Watch, and demand increased for iPads, Mac computers and services from consumers working and studying from home during the pandemic.

Revenue was propelled by the iPhone 12, the first iPhone line to include four new models and 5G capabilities. Handset sales were $65.6 billion, easily beating Wall Street estimates of $60.3 billion.

"This strength in iPhone sales provides evidence for Apple bulls that another iPhone super cycle maybe in the cards," Dan Morgan, a senior portfolio manager at Synovus Trust Company. The last super cycle occurred with the iPhone 6 back in 2014 and launches since then have "felt more like ripples opposed to a wave," he added.

On a conference call with analysts, Apple executives said they expect sales growth from AirPods and other wearables to decelerate in the fiscal second quarter. They also warned Services sales in the period will face tougher comparisons with a year earlier.

Beyond the iPhone, Apple reported iPad sales of $8.44 billion, topping projections of $7.58 billion. The company launched a redesigned iPad Air and a faster entry-level model during the quarter. Mac sales were $8.68 billion, missing estimates of $8.86 billion. That comes despite Apple launching a new MacBook Pro, Mac mini, and MacBook Air during the quarter.

"They were probably supply constrained during the quarter," Cross said. "There are still significant delays for shipments for some models."

The influx of new hardware purchases also led to strong growth of the services segment, which includes the App Store, iTunes, Apple Music, and iCloud. The company reported $15.8 billion from services in the quarter, topping estimates of $14.9 billion.

Apple launched four major new products in the quarter into its Wearables, Home, and Accessories segment: 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 estimated $11.84 billion.

Apple saw significant growth in all major geographies, including in Greater China where sales jumped to $21.3 billion from $13.6 billion a year ago. The company reported $46.3 billion in revenue in the Americas region, up about $5 billion from the year-ago period.

© Copyright 2021 Bloomberg News. All rights reserved.

Apple Inc. shares fell after a cautious outlook from executives overshadowed quarterly revenue that topped $100 billion for the first time. Shares of the company declined more than 2% in extended trading.
apple, revenue, earnings, wall street, iphone 12, super cycle
Wednesday, 27 January 2021 06:18 PM
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