An Apple store in Bangkok.
Mladen Antonov/AFP via Getty ImagesApple posted better-than-expected results for its fiscal first quarter as customer snapped up iPhones, Macs, iPads and other Apple products at an impressive pace. Sales topped Wall Street’s expectations in every category.
Heading into the quarter, Wall Street analysts’ expectations were driven in particular by the potential for a blowout quarter for iPhone sales, after the recent launch of the iPhone 12 lineup. And Apple (ticker: AAPL) delivered.
On a conference call with analysts, CEO Tim Cook said the company passed 1.65 billion total installed devices worldwide in the quarter, with the installed base of iPhone topping 1 billion. He also said the company had record revenue in all geographic areas.
Overall, Apple posted revenue of $111.4 billion, up 21% from the year-earlier quarter, and profits of $1.68 a share. That was well above the Street consensus at $102.8 billion and $1.40 a share.
Apple posted iPhone revenue in the quarter of $65.6. billion, up 17% from a year ago, well above the Street consensus of $59.6 billion as tracked by FactSet.
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The three months ended Dec. 31 were also strong for laptops and tables. For iPads, sales were $8.4 billion, up 41%, and ahead of the Street at $7.4 billion. For Macs, which got a boost from both the arrival of the first models powered by Apple’s homegrown M1 processor and the continuing pick-up in demand triggered by the stay-at-home trend, sales were $8.7 billion, up 21%, and slightly above the Street’s forecast of $8.6 billion.
Wearables sales were strong as well, growing 30% to $13 billion, ahead of the Street at $11.5 billion. And services revenue jumped 24% to $15.7 billion, ahead of the Street consensus at $15.2 billion.
Sales were up 12% in the Americas, 17% in Europe, and 57% in Greater China, with gains of 33% in Japan and 11.5% in the rest of Asia.
“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,” CFO Luca Maestri said in a statement. “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.”
The company said it repurchased $24.8 billion of stock in the quarter.
Apple didn’t provide financial forecasts in the release. For the seasonally softer March quarter, the Street’s consensus expectation has been for $74 billion in revenue and profits of 90 cents a share.
Maestri said on the call that given ongoing uncertainty due to the pandemic, the company again is not providing details about the outlook for revenues and profits. But the company said that it does expect revenue growth to accelerate on a year over year basis. He said the company expects some deceleration sequentially in services growth, due to a difficult year-ago comparison, and that it also expects slower growth in wearables.
Gross margin in the latest quarter was 39.8%, up from 38.4% a year earlier. The result in the current quarter is expected to be in line with the more recent figure.
After an 82% rally in 2020, the stock has added another 7% this year. The stock remains the largest company in the world by market capitalization, with a valuation of just under $2.4 trillion.
The company finished the quarter with $196 billion in cash and securities, offset by $112 billion in total debt, for net cash of $84 billion, the CFO said.
Write to Eric J. Savitz at eric.savitz@barrons.com
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