Apple (AAPL) posts record sales, easily beats estimates

Apple Inc. (AAPL) posted record revenues in the quarter ended December 31, 2020, which is the company’s first quarter of fiscal 2021, beating analyst estimates and representing significant gains From one year to another. Earnings per share (EPS) was $ 1.68, 19.1% better than the consensus estimate of $ 1.41 and 34.4% higher than the figure of $ 1.25 earned during the same period a year earlier.

Total revenue was $ 111.44 billion, beating the consensus estimate of $ 103.28 billion by 7.9% and representing a 21.4% increase from the figure of 91 , 82 billion dollars set aside for the same period a year ago. This is the first time Apple has reported $ 100 billion or more in quarterly sales.

Large scale force

Apple’s record performance was driven by a strong increase in revenue. “Our sales performance in the December quarter was fueled by double-digit growth in each product category, which generated record sales in each of our geographic segments and a record level for our installed base of devices. assets, ”said Luca Maestri, Chief Financial Officer of Apple (CFO).

The revenue figures and year-over-year percentage increases by product category, as well as the margins by which they exceeded (or missed) estimates, were as follows:

• iPhone: $ 65.60 billion, up 17.2%, beating estimate of 9.7%
• Mac: $ 8.68 billion, up 21.2%, failed estimate of 0.1%
• iPad: $ 8.44 billion, up 41.1%, beating estimate of 13.1%
• Wearable, home and accessories: $ 12.97 billion, up 29.6%, beating the estimate of 8.4%
• Services: $ 15.76 billion, up 23.9%, beating the estimate of 6.5%

Quarterly revenue records were set in the iPhone, Wearable and Services categories.

Breaking down the data by region, the revenue figures and year-over-year percentage increases were as follows:

• Americas: $ 46.31 billion, up 11.9%
• Europe: $ 27.31 billion, up 17.4%
• Greater China: $ 21.31 billion, up 56.9%
• Japan: $ 8.29 billion, up 33.3%
• Rest of Asia-Pacific: $ 8.23 ​​billion, up 11.1%

Apple CEO Tim Cook believes the results could have been even more impressive, had it not been for the Apple Store closures precipitated by COVID-19. As he told CNBC: “By taking stores out of the equation, especially iPhones and portable devices, there is a drag on sales.” Cook also reported that Apple’s total installed base for iPhones is over 1 billion, up from the previous data point of 900 million, while the total active installed base for all Apple products is now 1 billion. , 65 billion.

Increased returns on capital to shareholders

Apple returned $ 28.39 billion to shareholders through share buybacks and dividends in the first quarter of fiscal 2021, an increase of 17.1% from the same period a year earlier .Apple’s operating cash flow of $ 38.76 billion was a quarterly record, and CFO Maestri said that “we are maintaining our goal of achieving a neutral net cash position over time.”

Importance for investors

The widespread revenue gains reported by Apple are certainly an indicator of strength. Indeed, as noted above, CEO Tim Cook felt that certain categories of product sales could have been even larger, if not for Apple Store closures in response to COVID-19.

However, a key unanswered question is the extent to which COVID-19 lockdowns have boosted sales to people forced to work from home or spend more free time at home. It’s possible that the events of 2020 created one-off quantum leaps in the underlying drivers of Apple’s sales, to a degree that may not be replicable as 2021 progresses.