The ups and downs of Apple’s revenue, diluted earnings, iPhone sales, services and wearables.
Apple missed badly on iPhone revenue — naturally, not having shipped any iPhones 12 in the quarter — but hit it out of the park in Macs, Services and Wearables. No December quarter guidance. Shares fell more than 4% in after-hours trading before recovering slightly.
From the press release:
“Apple capped off a fiscal year defined by innovation in the face of adversity with a September quarter record, led by all-time records for Mac and Services,” said Tim Cook, Apple’s CEO. “Despite the ongoing impacts of COVID-19, Apple is in the midst of our most prolific product introduction period ever, and the early response to all our new products, led by our first 5G-enabled iPhone lineup, has been tremendously positive. From remote learning to the home office, Apple products have been a window to the world for users as the pandemic continues, and our teams have met the needs of this moment with creativity, passion, and the kinds of big ideas that only Apple can deliver.”
“Our outstanding September quarter performance concludes a remarkable fiscal year, where we established new all-time records for revenue, earnings per share, and free cash flow, in spite of an extremely volatile and challenging macro environment,” said Luca Maestri, Apple’s CFO. “Our sales results and the unmatched loyalty of our customers drove our active installed base of devices to an all-time high in all of our major product categories. We also returned nearly $22 billion to shareholders during the quarter, as we maintain our target of reaching a net cash neutral position over time.”
Apple’s Board of Directors has declared a cash dividend of $0.205 per share of the Company’s common stock. The dividend is payable on November 12, 2020 to shareholders of record as of the close of business on November 9, 2020.
Earnings call Transcript and audio. Apple’s 10-K.
Below: The five charts. Click the second column to see year-over-year growth. (Not seeing the charts? Try the website.)
Would appreciate listeners perceptions of the call especially any discussion re: Dec quarter.
Luca said several times that they don’t expect foreign exchange to be an issue this quarter.
TC said that they expect the work from home and learn from home phenomena to continue unchanged for the near future. I guess this means another strong quarter for Macs and iPads, especially as new product comes out. The new iPad Air looks very attractive.
Next time make it easy on yourself — download the “Apple Quarterly Earnings Call” podcast within the Podcasts app. The recording usually stays available for two weeks, then it’s pulled.
Entire session is usually available a couple of hours after the call’s completion.
Cheers.
Apple is not providing “guidance” but Lucas is talking about their sales expectations for Oct/Dec based on what they are seeing in October. Tim is “confident we will grow our sales in China this quarter.”
On hind sight, Ms. Huberty should have stuck by her guns.
“As a result, we believe Apple is likely to report September quarter iPhone sales well above our $22.9B (-31% Y/Y) forecast, and closer to in-line with the consensus revenue forecast of $27.9B.”
They reported $26.4 billion in iPhone revenue. That’s “closer to in-line with the consensus.”
Or not. When you boil it down, it’s just my opinion….
The fact that they managed to keep revenue the same without a new iPhone launch in the quarter should be a huge positive, since all that happened were phones delayed to the next quarter. This substantial AH drop smacks of opportunism. Either that or the AI algorithms driving the automated AH trading couldn’t be taught quickly enough that the missing revenue doesn’t matter…
I thought everything I heard sounded great!
Samsung will desperately try to steal iPhone thunder by moving up intro date of newest Galaxy S21 (or S30, who knows these days) from February to January 2021.
I have seen this movie too many time as an Apple investor, I either take advantage and buy more, or just sleep it off.
Exactly. When it comes to Apple (and politics), one can never be too cynical.
iPhone $ 26,444 $ 33,362 $ 137,781 $ 142,381 -3.23%
Mac 9,032 6,991 28,622 25,740 +11.2%
iPad 6,797 4,656 23,724 21,280 +11.5%
Wearables 7,876 6,520 30,620 24,482 +25.1%
Services 14,549 12,511 53,768 46,291 +16.15%
Tot sales $ 64,698 $ 64,040 $ 274,515 $ 260,174 +5.51% w/o new iPhone intro!
RE: YOY, iPhones would have been flat if Q4 2020 had been flat ($33.4) with normal iPhone intro numbers, essentially down the $7B from this quarter – pretty good IMO for a huge pandemic hit & new iPhone delay. Mac +11.2%, iPad +11.5%, Wearables +25.1%, Services +16.15%, total up +5.51% w/o new iPhone intro revenue.
Mac +2.88B, iPad +2.44B, Wearables, Home & Acc. up 6.14B, and Services up 7.48B.
Up 18.94B non-iPhone rev, down 4.60B iPhone rev.
Looking to 2021, comparisons for Q1-4 should be manageable, even if flat to slightly down (<1%) for Macs & iPads due to pull forward. Wearables should continue growing at double digits, especially if Watch, AirPods, AirTags, new Apple TV, plus HomePod Mini and iPhone 12 accessories (cases, MagSafe, etc.) take off. Given iPhone 12 runway, they should. Similarly, Services should also grow mid-teens with iPhone 12 related AppleCare, App Store sales. Interestingly, subtract out Google $9B payment and services may be hit only $1.5B or so while other services revenue is still ramping up, could be a one time decline.
Key here is a 5% increase overall in the face of a 3.23% decline in iPhone revenue due to the pandemic delay. This means
1) Double digit growth in all non-iPhone lines of business.
2) Strong iPhone sales as supply catches up with demand.
3) Gross margin improvements due to high-margin services and BOM cost improvements in the months following new product releases.
The Q2 March quarter will be massive though and be a huge increase year on year.
“The Q2 March quarter will be massive though and be a huge increase year on year.”
I’d use the term “should be” rather than “will be”. The sheer number of black swans over the last few years has made me nervous about expecting things to go smoothly for once. Otherwise I totally agree.
Impressive is the continued strong growth from Macs, iPads and Wearables. I predict these trends continue.
Did you know, though, that the Apple’s Wearables segment including the Watch and AirPods were for the FY Apple’s second-biggest hardware category, ahead of the Macs and iPads? That is impressive! It only will get better with new AirPods upgrades rolling out early next year.
We also cannot forget about the HomePod mini. The Holidays are upon us. Work from home and school from home continues.
Q1 ’21 is going to give the analysts the clarity they seek on the iPhone 12 reception. When analysts see that clarity then they become believers, and we all see that $150 stock price by the Q2 ’21 financial call, if not before then.
What does this mean?
Any pull-back from a short-sighted, short-term, click-bait headline sell-off is a whopping buying opportunity, because next January’s ER will be an unmitigated pent-up blowout.
The moral to this rerun? Good things come to those who wait.
HomePod mini will be a huge hit, akin to AirPods — within reach of most (if not all) — allowing Apple to gain a well-deserved recognition as an influencer and implementer in the now nascent, total sound for the home.
Especially as it snowballs in satisfaction throughout 2021 and beyond.
That all but confirms AirTags and AirPods Studio (over the ear headphones).