Tech giant Apple Inc (Nasdaq: AAPL) reported its fiscal 2021 first-quarter results that easily surpassed analysts’ estimates. Notably, the company recorded its most considerable quarterly revenue. Incidentally, it is also the first-time Apple recorded quarterly revenue of over $100 billion. Interestingly, products in all categories recorded double-digit growth in sales, including 5G enabled iPhones. Despite the factual earnings report, the stock closed at $137.09, down $4.97 or 3.50% from the previous close.
Cupertino, California-based Apple reported fiscal 2021 first-quarter net sales of $111.44 billion, a 21% increase from $91.819 billion in the comparable quarter last year. Global sales accounted for 64% of total sales, increasing from 61% on a y-o-y basis. Specifically, greater China (includes Taiwan and Hong Kong) sales increased about 57% to $21.30 billion.
For the quarter ended December 26, 2020, the company posted a net income of $28.755 billion, or $1.68 per share, compared with $22.236 billion, or $1.25 per share in the quarter ended December 28, 2019.
Analysts polled by Refinitiv had anticipated the company to post earnings of $1.41 per share on revenues of $103.28 billion.
The company’s CEO, Tim Cook, pointed out that the performance was slightly affected due to shut down of some of its shops across the globe as governments enforced stringent measures to contain the spread of the COVID-19 pandemic.
Cook said, “Taking the stores out of the equation, particularly for iPhones and wearables, there’s a drag on sales.”
Segment-wise,
- iPhone revenues increased 17% y-o-y to $65.597 billion and surpassed estimates of $59.80 billion
- Mac revenues were $8.675 billion, an increase of 21% on a y-o-y basis, but missed the $8.69 billion anticipated by analysts.
- iPad revenues were $8.435 billion, up 41% from last year, and exceeded analysts’ estimates of $7.46 billion.
- Wearables, Home, and Accessories (other products) revenues rose by 29% y-o-y to $12.971 billion and eclipsed the consensus estimate of $11.96 billion.
- Services revenues were $15.761 billion, reflecting a growth of 24% from the prior year. Refinitiv analysts had anticipated revenues of $14.80 billion for the quarter.
The CEO also revealed that iPhones’ install base had crossed 1 billion, from the earlier level of about 900 million. Likewise, the aggregate install base of all gadgets from Apple is 1.65 billion.
The company refrained from issuing any guidance as it has been doing since the outbreak of COVID-19. Apple continues to gain immensely from the pandemic as lockdowns have forced people to work from home, and students were taught online. That has led to a sharp rise in the sales of PC and other gadgets.
The company rolled out four 5G enabled iPhone models in October. At that time, investors believed that the launch of 5G enabled iPhones could result in a ‘supercycle’ of users wanting to upgrade. As anticipated, iPhone sales increased 17% from the comparable quarter last year.
Despite a decline in traveling by people, the sales of headphones (Beats and AirPods) and Apple Watch increased 29% y-o-y to $12.97 billion. Notably, in December, the company introduced a premium headphone set (AirPods Pro Max) for $549.
During the first quarter, the company launched Mac computers that run on in-house designed chips rather than Intel processors. The latest range of Mac computers has garnered positive reviews from users.
The company’s services business, which Apple perceives as a future growth engine, rose by 24% y-o-y to $15.76 billion. That division includes App Store, Apple TV+, Apple Music, AppleCare warranties, and licensing fees from Google for having it as the default search engine.
The company also declared a cash dividend of $0.205 per share. Overall, during the quarter, the company had returned over $30 billion to shareholders, including the sum spent on three share buybacks.
The robust results and double-digit sales growth of all products are expected to turn the stock bullish in the days ahead.
The historical price chart indicates that the stock continues to hold above its ascending trend line. Additionally, the MACD (histogram) indicator reading has turned positive. Therefore, we anticipate the stock to begin a fresh uptrend in the days ahead.
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