Tim Cook, CEO of Apple, speaks during an Apple Event on April 20th, 2021.
Source: Apple Inc.
Apple reported a blowout quarter on Wednesday, announcing companywide sales up 54% higher than last year, and significantly stronger profits than Wall Street expected.
Apple stock rose 4% in extended trading.
Apple reported double-digit growth in every single one of its product categories, and its most important product line, the iPhone, was up 65.5% from last year. Its Mac and iPad sales did better, with its computers up 70.1% and iPad sales growing nearly 79% on an annual basis.
Apple said it would increase its dividend by 7% to $0.22 per share and authorized $90 billion in share buybacks, which is significantly higher than last year’s $50 billion outlay and 2019’s $75 billion.
Here’s how Apple did versus Refinitiv estimates:
- EPS: $1.40 vs. $0.99 estimated
- Revenue: $89.58 billion vs. $77.36 billion estimated, up 53.7% year-over-year
- iPhone revenue: $47.94 billion vs. $41.43 billion estimated, up 65.5% year-over-year
- Services revenue: $16.90 billion vs. $15.57 billion estimated, up 26.7% year over year
- Other Products revenue: $7.83 billion vs. $7.79 billion estimated, up 24% year-over-year
- Mac revenue: $9.10 billion vs. $6.86 billion estimated, up 70.1% year-over-year
- iPad revenue: $7.80 billion vs. $5.58 billion estimated, up 78.9% year-over-year
- Gross margin: 42.5% vs. 39.8% estimated
Apple did not issue official guidance for what it expects in the quarter ending in June. It hasn’t provided revenue guidance since the start of the pandemic, citing uncertainty. This is Apple’s second quarter in a row with double-digit growth in all product categories.
Apple has said in the past months that its business has been boosted by the pandemic as consumers and businesses bought computers to work and entertain themselves while at home. But Apple’s strong results in the quarter suggest that the trend may persist as more economies open up.
Or, as Apple CEO Tim Cook said in a statement: “This quarter reflects both the enduring ways our products have helped our users meet this moment in their own lives, as well as the optimism consumers seem to feel about better days ahead for all of us.”
Mac sales were up 70%, and one driver was likely the company’s introduction of its Mac laptops that used its own chips for longer battery life, instead of processors sold by Intel. iPad sales were up nearly 79% year-over-year.
“We’re seeing strong first-time buyers on the Mac … it continues to run just south of 50%,” Cook told CNBC’s Josh Lipton. “And, in China, it’s even higher than that … it’s more around two-thirds. And that speaks to people preferring to work on the Mac.”
Neither of those results include iPad Pro or iMac models the company announced in March, which are expected to drive additional demand.
Apple’s iPhone also reported strong results this quarter, quelling fears that the current annual cycle could slow down. Last year, Apple released iPhones with a new exterior design and 5G support, which many investors believed could prompt a major upgrade cycle, which this quarter’s results indicate.
In greater China, which includes the mainland, Hong Kong, and Taiwan, Apple’s revenue increased over 87% year-over-year to $17.73 billion, although the comparison is to a quarter last year in which China was largely shut down in the early days of the pandemic. Every other geographical category, including the Americas and Europe, were also up on an annual basis.
Apple’s high-margin services business, including iCloud, App Store, and subscriptions like Apple Music, also showed 26.7% growth.
Apple’s gross margin was also unusually elevated for the company. Most quarters, it tends to be in the 38% to 39% range, but in the quarter ending in March, Apple reported 42.5% margins.
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