Shares of Apple Inc. fell more than 3 percent in extended transactions after a cautious executive outlook overshadowed quarterly revenue, which topped $ 100 billion for the first time.
While the company did not provide an official forecast for the fourth consecutive quarter, executives said sales of AirPods and other portable devices will increase in the current quarter. They also warned that sales of services in that period will face tougher comparisons a year earlier.
“It was an extremely strong quarter. What is probably weighing on the stock at the moment is that they have not provided guidance, “said Shannon Cross of Cross Research.
Sales rose 21 percent to $ 111.4 billion in the December 26 period, the company said in a statement on Wednesday. statement. Analysts, on average, expected $ 103.1 billion, according to data compiled by Bloomberg. Profit was $ 1.68 per share, exceeding Wall Street estimates.
Expectations have been raised for Apple over suggestions for a new “super cycle” for the iPhone, in which millions of existing users upgrade old phones. The company recently introduced other new devices, including an updated Apple Watch, and increased demand for iPads, Macs and services from consumers who work and study from home during the pandemic. The stock has risen more than 20 percent in the past three months, closing at $ 142.06 in New York on Wednesday.
Revenue was driven by the iPhone 12, the first iPhone line to include four new models and 5G capabilities. Phone sales were $ 65.6 billion, easily exceeding Wall Street estimates of $ 60.3 billion. Consumers have been lured by the 5G capabilities, especially in China, and the improved camera features of the Pro models.
“This strength in iPhone sales provides evidence for Apple bulls that another super iPhone cycle may be in the books,” said Dan Morgan, senior portfolio manager at Synovus Trust Company. The last super cycle took place with the iPhone 6 in 2014 and the launches since then have “felt more like waves opposite a wave, ”he added.
During a conference with analysts, CEO Tim Cook and Chief Financial Officer Luca Maestri were confident about the iPhone business. They said that the more expensive iPhone 12 Pro and iPhone 12 Pro Max models with better cameras sold particularly well. The executives also highlighted strong sales in China, saying there is a growing demand there for iPhones with 5G capabilities.
Apple also said the number of active devices exceeded 1.65 billion in the first fiscal quarter, which includes more than 1 billion active iPhone users. Cook added that Apple has seen the largest number of upgrades ever during this period and noted that the switch from other smartphones has also been strong.
Beyond the iPhone, Apple reported iPad sales of $ 8.44 billion, exceeding projections of $ 7.58 billion. The company launched a redesigned iPad Air and a faster entry-level model during the quarter. Mac sales were $ 8.68 billion, with estimates of $ 8.86 billion missing. This is despite the fact that Apple launched a new MacBook Pro, Mac mini and MacBook Air in that quarter.
“They were probably forced to supply during the quarter. There are still significant delays in deliveries for some models, “said Cross.
The flow of new hardware purchases has also led to a strong growth in the service segment, which includes the App Store, iTunes, Apple Music and iCloud. The company reported $ 15.8 billion in services in the quarter, exceeding estimates of $ 14.9 billion.
The company showed strong growth for iCloud, Apple Music and App Store subscriptions, but did not provide details about the performance of TV +, its new video streaming service. The company recently extended the free TV + trials for a few more months.
Apple launched four major new products in its quarter in the Wearables, Home and Accessories segment: Apple Watch Series 6, Apple Watch SE, HomePod mini speaker and AirPods Max headphones. These devices have given Apple the strongest quarter to date for this segment, with revenue of $ 12.97 billion. Analysts estimated $ 11.84 billion.
Apple saw significant growth in all major geographic areas, including Greater China, where sales rose to $ 21.3 billion from $ 13.6 billion a year ago. The company reported revenue of $ 46.3 billion in the Americas, up about $ 5 billion from a year ago.
(CEO updates, CFO comments on more expensive iPhones in the ninth paragraph.)