Apple’s blowout June quarter in five easy charts

The ups and downs of Apple’s revenue, diluted earnings, iPhone sales, services and wearables.

Apple blowout Q3 2020 easy chartsNot 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.)

Total revenue:

EPS:

iPhone revenue:

Services revenue:

Wearables revenue:

37 Comments

  1. Dan Scropos said:
    I tried to tell everyone this. Even my 56.1 billion on revenue was light. What a blowout quarter.

    7
    July 30, 2020
    • Bart Yee said:
      Dan, you were right. My numbers kept saying $56.14 and even that was light!

      3
      July 30, 2020
  2. Romeo A Esparrago Jr said:
    I wondered in an earlier post if there was going to be a stock split. Did that happen? It did!!

    5
    July 30, 2020
  3. Romeo A Esparrago Jr said:
    Looks like my prediction for Founders Day 2021 has been passed in after-hours trading 9 months prematurely! I’m not going to win that subscription LOL.

    3
    July 30, 2020
    • David Drinkwater said:
      Yeah. I feel your pain.

      0
      July 31, 2020
  4. Bart Yee said:
    Staggering!! Going to be very happy to be way underwater come April 1, 2021! When I was running the numbers last night for Q3, my revenue projections kept saying $56.15B, even higher than Brother Dan was suggesting. I dropped it by $1.5B for Forex losses. My numbers also kept suggesting that EPS should be upwards of $2.50 which I just couldn’t believe so I tamped it down with expenses till it looked, at the time, to be justified good. I assumed the costs of doing business were just as normal as without the pandemic. But the revenue was so good, it swamped any expense issues, plus maybe the buybacks exceeded 60M shares. I’m checking the 10Q now.
    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.

    4
    July 30, 2020
    • David Emery said:
      Dollar is down a fair amount at least against the Euro. Seems to me that’s A Good Thing for Apple, right?

      2
      July 30, 2020
    • Dan Scropos said:
      Nice work, Bart. Leary’s post what you believed eve around here. You’re amongst friends!

      This is notable: 3% FX headwinds or the numbers could have been even better. Mercy.

      1
      July 30, 2020
  5. Alan Birnbaum said:
    Congrats on all the Longs (Myself included) !

    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) ?

    2
    July 30, 2020
  6. Romeo A Esparrago Jr said:
    So my dear Mr. Philip will have four shares in his pocket, come August 24th, instead of just his one today. Did I hear that, right, folks? 🙂 Smart guy, that he is.

    9
    July 30, 2020
    • Kathy Corby said:
      Hey, don’t knock it. He can buy a few beers for his friends with the money he made today on his share. Of course, he would have to sell it. I would advise against that.

      0
      July 30, 2020
  7. David Emery said:
    The thing that caught my eye (after I caught my breath 🙂 was the substantial increase in both iPad and Mac sales.

    6
    July 30, 2020
    • Dan Scropos said:
      Mac had a staggering quarter, considering the circumstances.

      2
      July 30, 2020
    • David Emery said:
      Luca: ” Around half of the customers purchasing Mac and iPad during the quarter were new to that product. And as a result, the active installed base for both products reached a new all time high.”

      4
      July 30, 2020
    • Jacob Feenstra said:
      People starting to work at home. Kids starting to study at home. Those are among the main reasons would be my guess.

      0
      July 30, 2020
  8. David Baraff said:
    I can’t believe I sold covered AAPL 400 calls back when were at 340, on June 15th!

    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…

    3
    July 30, 2020
    • Lalit Jagtap said:
      When people can not spend money on sports, travel vacations, during a pandemic. And if they want to enjoy, it might be natural to pay a premium for “Apple Walled Garden”.

      2
      July 30, 2020
  9. Lalit Jagtap said:
    Thank you Rod Hall at Goldman, and other “experts analysts” who helped bring AAPL down to $360 in last few weeks. I am lucky, as I was a buyer of AAPL. I love a few expert sell-side analysts at big banks. Also, as I worked as a technologist for Morgan Stanley until 2017.

    4
    July 30, 2020
  10. Jerry Doyle said:
    Friends of PED’s Blog: There is a pubic transitioning and generational shift over to Apple hardware. It’s been happening, but COVID-19 brought it to public attention sooner. Apple’s Services component will benefit from this public transitioning and generational shift over to Apple hardware & accessories.

    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????

    4
    July 30, 2020
    • David Baraff said:
      Sorry. Looking forward, I think AAPL is going to be a $100-125 stock quite soon now.

      Say, by end of August. (You heard it here first…)

      6
      July 30, 2020
      • Jerry Doyle said:
        @David Baraff: You’re right my friend! It’s hard to get accustomed to all that has happened this afternoon. PED will need to revisit his math to see who among us wins the contest.

        0
        July 30, 2020
      • Alan Birnbaum said:
        … then Rod Hall’s numbers will be in the money /s

        3
        July 30, 2020
      • Robert Martin said:
        So, you see guys and gals, my prediction of $100 by April 1 might well be the closest of all. Of course I was hedging my bets that millions of people might have expired of the virus by then and the world would be in the deepest of depressions. This might still happen, but meanwhile let’s revel in what we have and hope the best for the future.

        Did I expect a split? Of course not.

        0
        July 30, 2020
  11. Jerry Doyle said:
    As I write, Apple is up $22.74 in after hours’ trading at $407.40.

    0
    July 30, 2020
  12. Jerry Doyle said:
    Just shooting from the hip knowing the current global economic conditions, and of the new and innovative Apple products in the pipeline ready to flow forth under the auspicious leadership of Tim Cook, it is not being disregardful to see $500 by end of Q2 2021. (March 31, 2021)

    1
    July 30, 2020
  13. Jerry Doyle said:
    Brother PED: If it is not an imposition, at your earliest convenience would you be so kind as to post the target prices of FOBs so we can see who remains above water? I have a target price of $403 and now am underwater. There can’t be that many folk left.

    1
    July 30, 2020
  14. David Baraff said:
    PED, can we have the option in the contest to either have our numbers adjusted for the split — or just leave as is?

    ‘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…]

    0
    July 30, 2020
  15. Mordechai Beizer said:
    PED, will you be selling 3 of your shares to get back to that nominal one share?

    0
    July 30, 2020
    • Bart Yee said:
      IMO, PED would not have to since he isn’t investing technically any more money than his initial outlay. OTOH, perhaps he should have additional investments in AAPL. I really wouldn’t have any problem with a blogger owning shares as long as it is disclosed.

      1
      July 30, 2020

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