Apple Beats the Street, again
The analysts expected Apple to underperform especially given their unprecedented warning early in the quarter that they would not meet their initial projection due to the uncertainty of the Covid-19 virus. The consensus number was somewhere around $54 billion in revenue, which is not shabby at all. However, Apple once again blew past those analyst projections and posted $58.3 billion in revenue and a profit of $11.2 billion or $2.55 per diluted share. This is simply phenomenal performance in the face of a world-wide economic shutdown and a pandemic.
This was on par and just a tad above their results for the same period a year ago. "Despite COVID-19's unprecedented global impact, we're proud to report that Apple grew for the quarter, driven by an all-time record in Services and a quarterly record for Wearables," said Apple CEO Tim Cook. "In this difficult environment, our users are depending on Apple products in renewed ways to stay connected, informed, creative, and productive. We feel motivated and inspired to not only keep meeting these needs in innovative ways, but to continue giving back to support the global response, from the tens of millions of face masks and custom-built face shields we've sent to medical professionals around the world, to the millions we've donated to organizations like Global Citizen and America's Food Fund."
The stars for the quarter were Apple wearables (watch, AirPods, etc) and services with a $1 billion increase over last year's numbers. Apple set a record quarterly revenue number for retail even though many of their stores closed during the quarter due to the pandemic. Apple's response to the pandemic included the production of 30 million masks and 7.5 million face shields.
Apple services posted 515 million subscriptions across all services which is up 125 million from a year ago. Wearables are now the size of a Fortune 140 company on its own. Apple said it has al all time high of Mac and iPad users.
Apple finished the quarter with over $200 billion in the bank, increased the quarterly dividend and added another $50 billion to their stock buy-back program.
It was another fantastic quarter for Apple challenged by the pandemic, supply chain disruptions and the need to divert resources to help find the virus. Apple's Covid-19 app had 2 million installs and they are working with Google to jointly produce a contact tracing app that could be key to keeping the virus under control as economies open. Congratulations to the Apple team!