Apple’s blowout December 2020 quarter in five easy charts

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

Apple earnings q1 2021 chartsAfter three all-time high closes in four days, Apple didn’t just beat expectations, it crushed them. I’ve never seen results so much higher than the analysts’ estimates.

The stock bounced around like a jumping bean in after-hours trading. Go figure.

From the press release:

Apple® today announced financial results for its fiscal 2021 first quarter ended December 26, 2020. The Company posted all-time record revenue of $111.4 billion, up 21 percent year over year, and quarterly earnings per diluted share of $1.68, up 35 percent. International sales accounted for 64 percent of the quarter’s revenue.

“This quarter for Apple wouldn’t have been possible without the tireless and innovative work of every Apple team member worldwide,” said Tim Cook, Apple’s CEO. “We’re gratified by the enthusiastic customer response to the unmatched line of cutting-edge products that we delivered across a historic holiday season. We are also focused on how we can help the communities we’re a part of build back strongly and equitably, through efforts like our Racial Equity and Justice Initiative as well as our multi-year commitment to invest $350 billion throughout the United States.”

“Our December quarter business performance was fueled by double-digit growth in each product category, which drove all-time revenue records in each of our geographic segments and an all-time high for our installed base of active devices,” said Luca Maestri, Apple’s CFO. “These results helped us generate record operating cash flow of $38.8 billion. We also returned over $30 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 February 11, 2021 to shareholders of record as of the close of business on February 8, 2021.

Below: The five charts. Click the second column to see year-over-year growth. (Not seeing the charts? Try the website.)

55 Comments

  1. Troy Thoman said:
    Luca says “These results helped us generate record operating cash flow of $38.8 billion. We also returned over $30 billion to shareholders during the quarter as we maintain our target of reaching a net cash neutral position over time.”

    hahaha when you make $38.8B but only spend 30… you ain’t gonna get neutral.

    Those charts are pretty… I don’t get why the stock isn’t up $10

    7
    January 27, 2021
  2. Fred Stein said:
    Spaceship Cupertino to earth: Do you read me? We’re going to infinity and beyond.

    7
    January 27, 2021
  3. Jacob Feenstra said:
    The law of the large numbers crawled into a dark corner… and wept.

    9
    January 27, 2021
  4. Kathy Corby said:
    As always, perfectly clear and informative, PED. Not to get too much into the weeds, but what happened to wearables growth? I thought that AirPods and the Watch were supposed to explode this quarter, but it looks as if year over year change is no big deal. (Overall, I’m pleased of course….)

    3
    January 27, 2021
    • Troy Thoman said:
      Kathy, I think airpods were fairly supply-constrained… the Max’s were for sure. I’m ok with that because next quarter will pick up where they left off.

      5
      January 27, 2021
    • Jacob Feenstra said:
      A 30% year over year growth in wearables is nothing to sneeze it.

      5
      January 27, 2021
    • Bart Yee said:
      Wearables took a hit in Q2 and Q3 2020 as the pandemic shut down sales and people considered how they would adapt to WFH and LFH. Q4 Wearables recovered sales momentum and this last quarter people were feeling much more confident about spending for Apple products including accessories. I’m sure it didn’t hurt that Watch 6 and MagSafe is also included in that category, mirroring a boost from iPhone 12 sales.

      0
      January 27, 2021
  5. James Dean said:
    30 Billion return to stockholders has to be a record somewhere…

    39+ GM, laggards, Thank you forex winds

    Ok, the call…

    3
    January 27, 2021
  6. Robert Paul Leitao said:
    Just a reminder to Apple 3.0 subscribers: We’re covering the conference call in the Apple 3.0 Slack group. If you have not asked for an invitation to join the Slack group, please contact Philip ASAP.

    2
    January 27, 2021
  7. Manfred Schwencke said:
    Kawooom! Revenue of 111 billion USD!
    All estimates smashed!
    As Dan Ives said: „buckle up“!
    Enioy the ride!
    Congrats to us longs!

    4
    January 27, 2021
  8. Romeo A Esparrago Jr said:
    To Gary Morton –
    with your 112.10B revenue and 1.62 EPS.
    🙂
    Nice work!!

    4
    January 27, 2021
  9. James Dean said:
    Q2 is going to kill, iPhone, Mac, Airpods, services, wearables, 39 + GM…
    iPhone 12 pro , two week back order, M1 higher Mac’s, two week backorder, forex tailwinds of 70 bip’s in Q2.
    Late launch of 12… anal.
    I really look forward to WWDC in early June.
    Supple balance by March end.
    April 28… woot!

    4
    January 27, 2021
  10. Phil Service said:
    No guidance for current quarter might be what’s holding the stock back in after hours.

    4
    January 27, 2021
  11. James Dean said:
    When you prepay TSM for all output, you kneecap all industries, auto, military, AMD, Nvidia, et al.
    Go away Tone S, normal levels… hmmm.

    6
    January 27, 2021
  12. Tommo_UK said:
    If these results had been announced yesterday the stock would be over $150.

    Don’t underestimate the volatility and fear caused by the GameStop Reddit et al phenomenon and vacillating Fed speakers undermining market confidence and raising the allure of cash in an environment where suddenly big money is being threatened by the Fed on one side, and teenagers trading on Robin Hood on the other.

    Simply bad timing for outrageously good results. Don’t underestimate the Reddit issue. It’s ripe for manipulation of stocks large and small and reminds me of the yahoo boiler plate stock forums of old except with 1000x more instant clout and a society getting its kicks from punishing those it perceives as rich (Musk should hang his head in shame for encouraging the GameStop squeeze – I can’t stand short funds any more than him but you don’t yell fire in a crowded theatre – the ricochet effect spills out way beyond ground zero.)

    11
    January 27, 2021
    • Bart Yee said:
      Agree, Some feel the numbers, even as good as they are, a blow out, were already baked into the stock price. Bad day overall on Wall Street soured the mood – MSFT benefitted yesterday when the market was happier, AAPL, as usual, suffered from this hangover. Any positive comments during the earnings conference call may move the stock. Again, many people continue to undervalue Apple and AAPL even at this price.

      BUT, a lot of money came off the overall market table so there’s dry powder to redistribute. Whether any more will come AAPL’s way, well we’ll see in the next few weeks to next quarter’s earnings call.

      3
      January 27, 2021
    • Spot on. Institutional investment mgrs are likely to meet & decide how much more to buy. Chinese New Year of the Ox approaches

      4
      January 27, 2021
    • Mark Visnic said:
      @Tommo 1,000 ups … could not agree more with every point you make about the uncertainty engendered in the market now with the disruptions of the short target names and the fallout into long liquid names, including Apple. The impact has rapidly become much more extensive and it is undermining any inclination to step in and buy a dip. Melvin Capital covered its short position but not before it needed to raise $2.75 billion to cover losses. Some of the capital raise likely involved selling long positions. That is just one example of the extended impact. The greater impact is the uncertainty that flows from it. The market is upside down, flying without instruments or visuals right now. Not only do fundamentals not matter, it is the zombie companies that are leading the market. It likely will lead to reactionary regulation with the usual unintended consequences but, even if it doesn’t it is undermining confidence in markets. I agree with the idea of having contempt for manipulative short sellers but this has become a social media driven mob that reminds of so-called “patriots” storming the US capital a couple of weeks ago, in other words a disingenuous perversity.

      5
      January 27, 2021
  13. James Dean said:
    Who grows at 21% in large cap?

    7
    January 27, 2021
  14. David Drinkwater said:
    It’s a phenomenal result. I look forward to the PED/Leitao conference call with Horace this weekend.

    I didn’t capture the limited estimates that were offered for next quarter (2021FQ2), but I think it would be very interesting to do a comparison of those and what was achieved in 2020FQ2. I think it will be a larger YOY change than we saw last year in FQ2.

    2
    January 27, 2021
  15. Bart Yee said:
    I was computing how the EPS was so much higher even with with great revenue – either they made more net income or they bought back a ton more stock. Turns out gross margin was much much higher than last quarter’s nominal 38.2% and rough guidance that it would stay the same.

    Gross revenue 111.439B – 67.111B cost of sales = 44.328B gross margin. 44.328/111.439 = 39.78%. Ives was modeling this margin increase in subsequent quarters.

    Services, Wearables, and iPads came in very strong over most estimates which probably accounted for part of the bump in GM. The 65,597 in iPhone revenue suggests @ $825 ASP unit sales of 79.7-80.0M units. I wouldn’t be surprised if Apple eeked out 31% GM on hardware & production despite adding OLEDS and Qualcomm modems. Increasing margin via Services and less labor intensive Wearables bodes well for future profitability. Moving / diversifying production to non-China may also contribute over the next 5 years.

    4
    January 27, 2021
    • John Konopka said:
      From the earnings statement:

      Shares used in computing earnings per share:
      Basic 16,935,119
      Diluted 17,113,688

      One year ago:
      Basic. 17,660,160
      Diluted. 17,818,417

      Roughly 700,000 shares less than last year.

      0
      January 27, 2021
      • Bart Yee said:
        @John Konopka
        Correct, Apple spent roughly $18B/quarter or $72B overall annually or every 4 quarters. In Q4 2020 they bought back roughly 155M shares @ $116/share. For Q1 2021, I modeled the same $18B spent buying about 151M shares @ avg $117.27/share. That would be 306M shares in last 6 months. In Q1 2020, they spent $20B 281.6M (70.4 split adjusted) shares at ASP of $71 ($284 split adjusted). Q2 same w/$18.5B spent for 286.27B shares (64.677M SA), ASP $65.7, and Q3 $16B for 205M (51.3M SA), ASP ~$78.

        0
        January 27, 2021
  16. Bart Yee said:
    Apple now down $4.31 in after hours trading. Not the response we thought was going to happen. Could be lack of guidance is spooking the market. Will have to review the transcript of the call.

    1
    January 27, 2021
    • Gregg Thurman said:
      Apple out performed in every category (by wide margin) just as I predicted (not actual degree) and still AAPL went down. Sometimes you can’t win for losing.

      I’ve seen a lot of crazy responses to earnings, but nothing like this.

      4
      January 27, 2021
  17. Michael Goldfeder said:
    @Joseph Bland: The short interest on Apple was just posted and surprisingly it went up to 99.897 million shares as of January 15, 2021, from 91.091 as of December 31, 2020.

    I’m thinking that’s partly keeping the stock down so the shorts can cover with what’s available in the AH market. The rest of this week will be interesting as that was a quarter to remember.

    6
    January 27, 2021
    • Gregg Thurman said:
      Shorts covering should have driven AAPL up (buying pressure). Something else was going on.

      1
      January 27, 2021
  18. bas flik said:
    nice results. and with inmense contraints
    so next quarter will be really explosive
    iphone is back
    250mio iphones x 873 asp
    will give blowout year
    supply is now the enemy
    can TSM produce enough chips?
    also people still do not understand the economic impact of Samsung being out of the race.
    so more and more people will switch out of android into ios.
    with this increase of EPS the multiple will quickly come down.
    or not and the stock explodes.
    most analyst slept while Apple did all those buy backs.
    and now that the iphone returned will all this revenu fall on a inmense reduces share count. simple math will tell that 200 wants to join us pretty soon.

    5
    January 27, 2021
    • Jerry Doyle said:
      @bas flik, Joseph Bland & others: Gene Munster addresses in this interview how the Q2 Mac results will be good due to supply constraints in Q1. Gene also continues giving (as usual) an excellent analysis of today’s call.

      https://apple.news/Azfk4MvEGRriNpESHzejLEA

      0
      January 27, 2021
  19. Alan Birnbaum said:
    … and considering the iPhone 12 releases were delayed, wowwwww.

    4
    January 27, 2021
    • Gregg Thurman said:
      And still the stock went down.

      0
      January 27, 2021
      • John Konopka said:
        Really curious indeed, the volume was about 19 million, very light for a day’s trade. Let’s see what happens tomorrow. That’s about $2B.

        One speculation was that the hedge funds were selling off their other holdings in order to cover their positions in GME, AMC and such. Weird times.

        1
        January 27, 2021
  20. Michael Goldfeder said:
    Even with the increase in shorts on Apple, the other variable involved could very well be the carnage occurring at Melvin Capital as that hedge fund apparently covered it’s short position losses in “Game Stop”, to the tune of $2.75 billion!

    My hunch is that they had to liquidate several long positions in multiple stocks to cover that astronomical number. Good riddance to shorts and hedge funds.

    4
    January 27, 2021
  21. bas flik said:
    its really sad when a stock comes down.

    1
    January 27, 2021
    • Jerry Doyle said:
      @bas flik: I do not believe Apple will be suppressed for long. Those were “blow-out” numbers today for Q1. Those performance numbers were “historical” and, it doesn’t end there; Q2 is going to come in very solid, too. Q2 is looking to be another historical quarter YOY for Apple. Once the dust from today settles, then investors will seek a solid blue chip stock with growth, plenty of cash, a safe investment ship to ride potential markets’ stormy seas. Where is that kind of investment ship? Apple. Shortly, investors will be buying Apple shares and the price will start rising to my $150 PT by April’s earnings call.

      3
      January 27, 2021
  22. Troy Thoman said:
    as a long term investor, the stock price AH on the day of earnings doesn’t matter to me. More time for Apple to pour money into buy backs. You can’t ignore the FCF, growth and EPS.

    5
    January 27, 2021
  23. Manfred Schwencke said:
    Volume in after hours is low:
    does not need much to move price down. Bad thing is that „media“ picks this up and writes about „tanking“ share prices.

    I expect that upcoming upgrades and money flow-in will move Apple up during the next trading sessions. Comparable to last summer when we had a strong uptick after earnings.

    Also, please give your impression:
    I thought that Tim was significantly more bullish on the outlook and guidance during the prepared remarks and the Q&A session in comparison to previous calls! Any comments / impressions?

    1
    January 28, 2021
    • Kirk DeBernardi said:
      @ Manfred Schwencke —

      I thought so too. I wonder how many listening picked up on that. It was subtle, but it was there.

      Tim’s such a balanced and cool cucumber when he speaks, if you listen into what he says and how he says it, you can pick up certain nuances. He seemed ultra confident (in HIS parlance) about Apple’s future.

      Sad the stock has dipped on such a wonderful quarterly performance during such pandemic-laden world stress, but give it ample time. The smart money will come around to recognize what a good investment AAPL continues to be.

      0
      January 28, 2021

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