Apple’s mixed September 2020 quarter in five easy charts

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

Apple earnings q4 2020Apple 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.)





34 Comments

  1. David Emery said:
    BIG jump in Mac revenue.

    3
    October 29, 2020
  2. Rodney Avilla said:
    I believe the street is simply punishing aapl for not giving guidance for qt 1

    1
    October 29, 2020
  3. Gregg Thurman said:
    On the road and Apple.com isn’t showing the Investors link. No access to conference call

    Would appreciate listeners perceptions of the call especially any discussion re: Dec quarter.

    1
    October 29, 2020
    • John Konopka said:
      If I heard it correctly I believe that TC said that they expect to see double digit growth in all products outside of the iPhone in the next 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.

      0
      October 29, 2020
    • Roger Schutte said:
      Won’t help you now, but next time go to: investor.Apple.com

      0
      October 29, 2020
    • Kirk DeBernardi said:
      @ Gregg Thurman —

      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.

      1
      October 29, 2020
  4. Mordechai Beizer said:
    Not surprising that China revenue is down given that iPhone 12 didn’t ship in the quarter. That’s one of the few regions where 5G makes a difference. My take is that Oct/Dec sales will be a blow out, especially in China.

    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.”

    4
    October 29, 2020
    • Arthur Cheng said:
      China is basically back to “business as usual”, unlike Europe and the US. The 5G network roll out is way ahead of the US. Nov. 11 is coming up, which is a huge shopping day in China, worth keeping an eye out with regards to iPhone sales.

      3
      October 29, 2020
      • Bart Yee said:
        Mini may not be a big China seller but iPhone 12 Pro Max may be, preorders start Nov. 6, availability on Nov. 13, a happy coincidence or shrewd timing?

        0
        October 30, 2020
    • Roger Schutte said:
      It won’t be a total blowout due to iPhones being many weeks later than normal. They probably won’t be able to make it up as Tim told us supply is constrained.

      0
      October 29, 2020
  5. Fred Stein said:
    Where is the Q4 ’20 revenue, first chart.

    1
    October 29, 2020
  6. David Baraff said:
    I’m really struggling to figure out why the market is down so much AH. The only thing I can come up with is that smart figure newbies will panic big time?

    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…

    2
    October 29, 2020
    • David Emery said:
      One guess could be bad comparisons with Amazon, Google and FB results…

      2
      October 29, 2020
    • David Drinkwater said:
      I don’t understand it, either. I mean, good intraday results, but it makes no sense to see the punishment after hours.

      I thought everything I heard sounded great!

      1
      October 29, 2020
    • Bart Yee said:
      Even though well known that new iPhone 12 intro and sales were deferred out to Q1 2021, the iPhone counters of the world will point to the YOY drop and FY2020 pandemic related decline in iPhone revenues, down -20.7% and -3.23% respectively. This will be deferred – offset to Q1 2021 iPhone numbers if sales are as good as they sound, especially after the iPhone 12 mini and Pro Max are available. Likely demand will extend into Q2 and moderate the normal seasonal decline. Also possible for Apple to introduce an updated SE in March?

      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.

      2
      October 29, 2020
    • Arthur Cheng said:
      I have seen this play out time and time again. They do know that the iPhone sales are just pushed into Q1 2021, but the WS guys are betting on the retail customers not reading the fine print and understanding this, so they push the price down with a “non headline headline” about iPhone revenue decline, so they can pick up the shares cheaper and wait for the jump next Q or 2 from the “coiled spring” effect.

      I have seen this movie too many time as an Apple investor, I either take advantage and buy more, or just sleep it off.

      8
      October 29, 2020
  7. Bart Yee said:
    Net sales Q4 2020 Q4 2019 YR 2020 YR 2019 YOY change

    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.

    1
    October 29, 2020
    • Bart Yee said:
      iPhone Q4 2020 Revenue essentially a mirror of Q3 (26.418B) which in hindsight makes perfect sense – demand remained steady for the 2019 models, no surge for new iPhones, but importantly, no drop off either. Why? For most value conscious iPhone users, 5G was not going to be a selling point (except in China and S. Korea) so why pay for it. Also, generous deals to move older stock likely played a role. YOY down 4.60B.
      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
      October 29, 2020
  8. Fred Stein said:
    They projected a very strong FY ’21 with:
    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.

    4
    October 29, 2020
    • David Emery said:
      But the ANALysts will focus on the iPhone number and the absence of next quarter estimates, ignoring those remarks. Sets up the careful listener/investor for a good return.

      1
      October 29, 2020
  9. Phil Service said:
    How typical. AAPL gets punished after-hours despite an excellent quarter for all things non-iPhone. And the iPhone results probably mostly attributable to lack of new models before the end of the quarter. My guess (hope?) is that saner heads will prevail tomorrow and the stock will get back a good bit of that AH slide. But, who knows? Maybe the broader market will have another swoon (as in yesterday). What a week.

    1
    October 29, 2020
  10. Phil Service said:
    P.S. PED, I’m looking forward to your round-up of analyst reactions.

    0
    October 29, 2020
  11. Kirk Burgess said:
    Worth noting that the December Q1 quarter we are currently in will also be negatively impacted on year on year comparisons due to the lack of iPhone availability until a significant way through the quarter (vs a full quarter of ramped up iPhone production in the year ago comparison). For that reason don’t expect a quick rebound in share price.

    The Q2 March quarter will be massive though and be a huge increase year on year.

    1
    October 29, 2020
  12. Jerry Doyle said:
    These financial results are very strong numbers to position Apple in its climb to $150 by 2Q ’21 financial results call. Folk can target only one area for critical comment and that area is the offset drop in iPhone sales due to the models late releases. We knew that fact going into the call.

    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.

    3
    October 29, 2020
  13. Kirk DeBernardi said:
    I’ll go out on my prediction limb once more…

    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.

    2
    October 29, 2020
  14. Dan Scropos said:
    “Without giving away too much, I can tell you that this year has a few more exciting things in store.” ~ Tim Cook

    That all but confirms AirTags and AirPods Studio (over the ear headphones).

    1
    October 30, 2020
  15. Horace Dediu said:
    How can one miss badly “naturally”. A miss is an unexpected event.

    1
    October 30, 2020

Leave a Reply