The ups and downs of Apple’s revenue, earnings per share, iPhone sales, services and wearables.
Apple handily beat the Street’s most bullish estimates, reporting revenue up 36% and EPS a cool 100%. Also notable were the year-over-year growth in iPhone revenue (50%), services (33%) and wearables et al. (36%).
Apple’s shares, which closed down $2.22 (-1.49%) for the day, popped briefly in after-hours trading before reverting to the doldrums.
From the press release:
Apple today announced financial results for its fiscal 2021 third quarter ended June 26, 2021. The Company posted a June quarter record revenue of $81.4 billion, up 36 percent year over year, and quarterly earnings per diluted share of $1.30.
“This quarter, our teams built on a period of unmatched innovation by sharing powerful new products with our users, at a time when using technology to connect people everywhere has never been more important,” said Tim Cook, Apple’s CEO. “We’re continuing to press forward in our work to infuse everything we make with the values that define us — by inspiring a new generation of developers to learn to code, moving closer to our 2030 environment goal, and engaging in the urgent work of building a more equitable future.”
“Our record June quarter operating performance included new revenue records in each of our geographic segments, double-digit growth in each of our product categories, and a new all-time high for our installed base of active devices,” said Luca Maestri, Apple’s CFO. “We generated $21 billion of operating cash flow, returned nearly $29 billion to our shareholders during the quarter, and continued to make significant investments across our business to support our long-term growth plans.”
Apple’s board of directors has declared a cash dividend of $0.22 per share of the Company’s common stock. The dividend is payable on August 12, 2021 to shareholders of record as of the close of business on August 9, 2021.
No formal revenue guidance, but quite a bit of forward-looking detail. Transcript here.
Below: The five charts. Click the second column to see year-over-year growth. (Not seeing the charts? Try the website.)
Guidance is a silly exercise, or course. And to say a stock’s valuation depends on it is beyond lame. But, of course, a fig leaf is a fig leaf, and so I thoroughly expect that to happen: If Apple chooses to say that the pandemic is still in place and therefore no guidance, the no-nothing “anal”-ists will jump on it with both feet to justify a valuation that doesn’t come close to matching reality.
The REALITY, meanwhile, is that Apple will continue to crush, not just income and revenue projections of these dim bulbs, but buy back stock with its massive cash flow at the dumber than dumb prices they engender.
Bring it on, dummies….
street is terrible in analysing apple.
how you can miss that much.
Making the elephant tap dance.
You did have it closer with this post:
Gregg Thurman said:
In the early days of Estimize there were as many as 1400 estimates submitted. Today that number has shrunk to about 300. The know nothing amateurs have flown the coup, leaving behind the pros and serious amateurs. This group habitually performs better than pure WS consensus.
My EPS estimate shows growth of 86% to $1.21. For quite a while my estimates have been in the top 8% at Estimize. Here’s hoping.
July 23, 2021
Apple went BOOM! AGAIN!
Having said that, so did MSFT, GOOGL, SBUX, etc. IMO, price action for AAPL may be blunted because of the competition for investment money by other companies with higher PE’s or sexy prospects. No matter, Apple will continue to grind higher.
“Full speed ahead and steady as she goes” says Captain Cook as he and his crew pilots the starship Apple. (With apologies to Star Trek and Bob Brinker’s MoneyTalk)
Where’s the ‘downs’?
142.83 -3.94 (-2.68%)
After hours: 05:33PM EDT
I feel a Rodney Dangerfield joke coming on:
My uncle’s dying wish – he wanted me on his lap. He was in the electric chair at the time.”
No Respect, No Respect !!!!
Stellar!
Not understandable that „professional analysts“ are that far off!
And even Cybart’s lofty guesstimate was $1billion short!
Unbelievable. Apple is absolutely crushing it, and yet AAPL gets crushed. It makes no sense to me, but Apple has a new ten weeks to grow into its true value before market shenanigans strike again.
Few people recognize that Services makes 22% of Apple’s gross revenue and pulls Apple’s gross margin up about 43+% over hardware.
“Apple is absolutely crushing it, and yet AAPL gets crushed.”
This is a pretty blatant attempt to influence the open market tomorrow. A single HUGE sale (relatively speaking, of course – this is, after all, not the open market) appears to have just hit the stock. But as I and others have said, this completely plays into Apple’s hand, setting up a much higher buyback quantity for a given amount spent.
This has been and remains a casino market. But Apple has put in place a system to take advantage of that in its massive buyback strategy. Now, Apple probably won’t come out of its blackout until next week (except for ASR’s of course), but this kind of market behavior is designed for one thing and one thing only: Driving weak hands over the cliff so the “smart” money can buy back in cheaper, gathering their “pelts” at the bottom of the cliff.
32 million shares retired.
Very good value for the money!
“25 billion buyback last quarter. 32 million shares retired.”
Boy, I hope not! That’s $781.25/share!
At the normal $19B buybacks/recent quarters, roughly 147M shares would be retired at ~$129.25/share
With roughly $25B in buybacks last quarter, using an extra $6B in an accelerated share purchase (ASP) program and an estimated avg share price (asp) of $129 would retire 193.8M shares.
I had modeled 197M shares assuming Apple management and directors would take advantage of the depressed prices below $126 during the quarter. This reduced the shares outstanding from 16.687B to 16.490B, giving further boost to EPS.
If analysts just looked at buybacks using grade school math:
1) In Q3 2020, Apple paid about $85/share.
2) Apple’s internal EPS annualized, going forward, would be over $6 or 7% or 6.5 * the 10 year treasuries rate.
3) Plus stock appreciation of 70%
4) And the stock is still under priced
Disclaimer – rough estimates, but so what.
Given the restrictions on the retail Apple stores along with the chips shortages, all I can say about the numbers for the quarter is: “Wow!”
M1 devices are “constrained” – i.e., they can’t build ’em fast enough!!!
I didn’t hear that, did I miss something? I thought I heard “iPhone and iPad,” which implies A-x processors, displays, or possibly modems.
So M1 is a constraint. That’s a surprise to me, it implies either manufacturing difficulties (lower yields than expected) or substantially greater demand than expected. Given the rest of the results, I think it’s probably the latter 🙂
iphone is huge.
street underestimate hardware business of apple
Wall Street is broken, but I can wait.
Sad trombone for the weekly players – they’re toast.
Indeed.
Too many analysts have consistently been lame when evaluating Apple. Now they’re even lamer.
It’s a word, I looked it up. “a stupid, inept, or dull person”
I wouldn’t go that far. If indeed I do lose some capital on this week’s trade, it will be the first in 7 weeks. Further, having been burnt twice before I changed my trading strategy in the event it happened again.
It’s quite possible AAPL will recover. All I need is a print of $149.50 to break even. That looks like a mountain right now, but I have a whole lot of dry powder to capitalize on AAPL’s price recovery when it occurs, and it will, just like it did the two previous times it sold off after beating earnings by a ton. It’s a matter of being patient.
Very much so brother Gregg T. Apple’s quarterly performance numbers sucked the oxygen from the lungs of many folk. Powerful performance! And, we know going into the end of the year that Apple is going to have very robust numbers. I believe what we saw today and this afternoon after close was some folk taking some off the table, especially after Luca used poor choice of words to describe current quarter Services revenue mitigating into the 4th quarter. I believe we will see a rush of investors flooding into Apple in the coming days and weeks driving the stock price to a PT of $175 by EoY.
– foreign exchange impact
– expect App store down YoY, yea right.
M1 adoption by heavy hitters including all of Mass Mutual (ahem, Philip.)
Katy Huberty – Katy barred the door?
I had to drop off then.
Let’s hope they remember to wash their hands when they’re done.
The short term performance of Apple shares around Earnings? Surreal to the point of being disconnected from reality. A diné on peyoté, almost every single time, but I vehemently disagree with any disappointed Apple shareholders around Earnings. I’ve lived through this rodeo many times, once at Calgary Stampede, during Apple earnings conf.
Sell away, at any price ye fools. Low prices certain to get devoured by buyback prog. & overseas investors.
I prepare for Earnings by checking my camping gear, listening to results, going to my land, pitching my tent, & maybe cross the border 8/9 to see Québécois, eh?
No cell signal or Internet at ‘Goretex home’, for several weeks. Only occasional coffee shops & suds slingers. Heaven is august New England after granite earnings.
Clearly, Apple is generating the cash flow to do it.
“As of March 27, 2021, the Company was authorized to purchase up to $225 billion of the Company’s common stock under the Program, announced on April 30, 2020, of which $211.6 billion had been utilized. The remaining $13.4 billion in the table
represents the amount available to repurchase shares under the Program as of March 27, 2021. On April 28, 2021, the Company announced the Board of Directors increased the Program authorization by $90 billion.”
So it appears Apple spent $19-25B of the 103.4B they had. The remaining 78.4-84.4B left would cover 3 more quarters easily at $25B/quarter if they wanted to, or 4 quarters @ $21B/quarter. Of course, with ~$21B of cash flow even in a “slow” quarter, getting to a “cash neutral” position seems like so much treading water. At this rate, the $85B cash hoard is never going to be used up.
Our core businesses are firing on all cylinders and WS yawns. Gene said to ignore the market’s reaction and focus on the company’s innovation of moving into massive growth markets in the coming decade such as transportation, health care, AR, all with the capacity to accelerate Apple’s growth exponentially in the coming years. Munster referenced what Joseph B always says. For Apple investors it all is about “patience” as a virtue.
When you factor-in these new market growth areas Apple is tapping into, then you are talking well-beyond a market capitalization of 2.5T. Dan Ives sees a 3T market cap for Apple by EoY.
It was denoted this afternoon by Tim Seymour on “Fast Money” traders that Apple now is getting essentially half its EPS from Services, a continuing flow of revenue subscriptions going forward, and growing. This means Apple’s valuation deserves a higher figure. There is this Apple hardware multiple & software multiple complex and WS needs to find what those multiples are for Apple’s true valuation. Why not just view as Dan Ives says as a “sum of its parts?” WS needs to view Apple’s growth multiple “holistically” in understanding the company’s true valuation going forward.
Lastly, what few folk are grasping is that WOW factor Tim Cook denoted in Apple’s “double digit” sales to new users from Android and double digit growth to users’ in Apple’s IB who are upgrading. That factor seems to have flown by many WS analysts’ heads. Did they not catch that fact? That is “powerfully” impressive! Apple’s hardware brings new users into the Apple ecosystem to put those new users into Apple’s “Services System.”
So, here we have Apple with a 30% plus margin on the hardware side feeding Apple upgrade users and new Android users into a Service ecosystem that has margins around 69%.
As Gene Munster says: There is the Apple business and there is the Apple stock. Eventually the stock price follows the business. For Apple long term investors: “patience is a virtue.”
While checking Yahoo Finance AAPL page for stats, I note in a small box that they still consider AAPL “overvalued”, they project a -6% estimated return over a 5yr time horizon. Precisely why I don’t subscribe to any Yahoo! finance services.
“Fair Value is the appropriate price for the shares of a company, based on its earnings and growth rate also interpreted as when P/E Ratio = Growth Rate. Estimated return represents the projected annual return you might expect after purchasing shares in the company and holding them over the default time horizon of 5 years, based on the EPS growth rate that we have projected.”
I agree wit the sentiment, but he’s the sharpest CFO in action/results, and in earnings calls. (Consider the balancing act he and Tim walk in these calls, as they continue executing buybacks.)
https://www.statista.com/statistics/263426/apples-global-revenue-since-1st-quarter-2005/
$125 would be a good buy price but, I’ve been there and done that and I won’t be waiting to buy there again as $145 is a good buy price and I expect a better probability of executing between 135 and 145 than 125 with this new information.