The ups and downs of Apple’s revenue, diluted earnings, iPhone sales, services and wearables.
Not only did Apple blow past expectation in its second covid quarter, the company also announced a four-to-one stock split.
An extraordinarily strong performance.
Apple jumped more than 5% immediately after the market closed and kept climbing. By 8 p.m. it had passed $409.
From the press release:
Apple today announced financial results for its fiscal 2020 third quarter ended June 27, 2020. The Company posted quarterly revenue of $59.7 billion, an increase of 11 percent from the year-ago quarter, and quarterly earnings per diluted share of $2.58, up 18 percent. International sales accounted for 60 percent of the quarter’s revenue.
“Apple’s record June quarter was driven by double-digit growth in both Products and Services and growth in each of our geographic segments,” said Tim Cook, Apple’s CEO. “In uncertain times, this performance is a testament to the important role our products play in our customers’ lives and to Apple’s relentless innovation. This is a challenging moment for our communities, and, from Apple’s new $100 million Racial Equity and Justice Initiative to a new commitment to be carbon neutral by 2030, we’re living the principle that what we make and do should create opportunity and leave the world better than we found it.”
“Our June quarter performance was strong evidence of Apple’s ability to innovate and execute during challenging times,” said Luca Maestri, Apple’s CFO. “The record business results drove our active installed base of devices to an all-time high in all of our geographic segments and all major product categories. We grew EPS by 18 percent and generated operating cash flow of $16.3 billion during the quarter, a June quarter record for both metrics.”
Apple’s Board of Directors has declared a cash dividend of $0.82 per share of the Company’s common stock. The dividend is payable on August 13, 2020 to shareholders of record as of the close of business on August 10, 2020.
The Board of Directors has also approved a four-for-one stock split to make the stock more accessible to a broader base of investors. Each Apple shareholder of record at the close of business on August 24, 2020 will receive three additional shares for every share held on the record date, and trading will begin on a split-adjusted basis on August 31, 2020.
No guidance given for the September quarter.
Below: The five charts. Click the second column to see year-over-year growth. (Not seeing the charts? Try the website.)
EPS:
Nope, they only purchased 50M shares, so revenue and net income were stellar and shares only decreased modestly in comparison to last quarter.
That also means Apple only spent about $15.5B on share buybacks out of the $90B now authorized. Which means they have plenty of dry powder for more rounds of buybacks over the coming year. Oh, BTW, the $16.3B FCF pretty much covered the buybacks for last quarter.
This is notable: 3% FX headwinds or the numbers could have been even better. Mercy.
Can anyone explain the repurchase of shares and having 4-1 split in August (I thought that by lowering share count was to squeeze short selling) ?
“…I thought that by lowering share count was to squeeze short selling…”
Apple doesn’t worry about that any more. If the price drops, they just get more bang per buyback buck.
What Apple DOES care about is democratizing its stock, that is, getting the price per share down where anyone can invest. Basically the opposite of Amazon, that’s perfectly ready to make AMZN shares elitist to the max.
Is the FOB 4/1/2021 challenge even valid anymore? I doubt we’ll be underwater with our existing price targets, or did I miss the fine print regarding a split.
(Please, no need to type a response if there is an easy URL to drop in.)
Ouch.
(I actually gave up and hedged them about 2 weeks ago, by buying a matching amount of AAPL common to cover them.)
Whomever said that selling covered calls is a “strategy for beginners” should be taken out and shot…
I wrote a comment on the blog during the past two weeks after many of the Apple analysts awoke suddenly to the fact that Apple was a $400 plus stock. The comment that I wrote was Apple is “a $500” stock. Every friggin’ one of us participating in PED’s target price contest come April 1, 2021 will be UNDER WATER! 🙂
Who among us do not see a path to $500 by end of Q1 2021????
Say, by end of August. (You heard it here first…)
Did I expect a split? Of course not.
‘Cause, frankly, I think I’ve got a better chance of winning if you don’t split adjust my number then if you do, at this point…
[Just did the math. If my number stays as is *and* I win with it, well, I’ll be buying a small island somewhere…]