Posted on 01/27/2021 6:41:58 PM PST by SeekAndFind
On the back of disappointing earnings from Facebook and Netflix, AAPL stock dipped into its earnings release, but as the company's stellar results just showed this may have been a bit premature, because Tim Cook's company just reported blockbuster earnings including its first ever $100BN quarter, around in its iPhone 12 release quarter.
Here are the details:
Some more details from the quarter:
Tim Cook gave some additional numbers, noting that AAPL now has an active installed base of 1.65bln devices, of which more than 1 billion iPhones; perhaps more importantly, AAPL has 620 million paid subscribers now as part of its ecosystem.
Of note: Mac sales were strong yet not strong enough to beat estimates despite soaring laptop sales which have surged during work and study from home. As Bloomberg notes, "there might be a bit of disappointment with that one". Still solid growth and a high number, and sales will likely skyrocket this year with redesigns coming to nearly the entire line.
One potential counter: as Bloomberg notes, "one of the major factors weighing on hardware sales has been global shortages of components. That might be what’s hurt Mac sales. Investors will be listening in closely on that front. Perhaps Apple’s switch to supplying itself with processors will alleviate that risk going forward?"
On the positive side, the Wearables, Home and Accessories boost is due to major updates in that line, including two new Apple Watch models, the AirPods Max headphones, and the HomePod mini. Apple went all out on accessories this past quarter
One potential negative: even in the company's record quarter - the one where the iPhone 12 was introduced - the company still can't meet its iPhone sales hit back in 2016-2017, confirming that Apple's iphone is no longer the must have accessory it once was.
This may explain why as Walter Piecyk notes, "that's the first time $AAPL R&D/revenue has dropped y/y since the June quarter in 2015, the year of the iPhone 6."
That's the first time $AAPL R&D/revenue has dropped y/y since the June quarter in 2015, the year of the iPhone 6. — Walter Piecyk (@WaltLightShed) January 27, 2021
The closely watched Services soared to $15.76BN, beating expectations of $14.89B...
... and up 23.9% from the $12.7BN a year ago.
Service revenue is likely to remain strong, likely due to the App Store, Apple Music, and iCloud subscriptions. Furthermore, the newest offerings - Fitness+, TV+, Arcade, News+, and Apple Card - all still appear to not have any material impact on the company.
Also remarkable was the surge in Chinese revenues, which soared by a whopping 57% Y/Y...
... to a record $21.31BN from $13.6Bn a year ago.
Discussing the quarter, Tim Cook said that “this quarter for Apple wouldn’t have been possible without the tireless and innovative work of every Apple team member worldwide. We’re gratified by the enthusiastic customer response to the unmatched line of cutting-edge products that we delivered across a historic holiday season. We are also focused on how we can help the communities we’re a part of build back strongly and equitably, through efforts like our Racial Equity and Justice Initiative as well as our multi-year commitment to invest $350 billion throughout the United States.”
Luca Maestri, Apple’s CFO, also chimed in saying that the "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. 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.”
And in keeping with this, Apple’s Board of Directors has declared a cash dividend of $0.205 per share of the Company’s common stock. The dividend is payable on February 11, 2021 to shareholders of record as of the close of business on February 8, 2021.
In his take on the quarter, Bloomberg analyst Anand Srinivsana said “No major surprises here - iphone was great -- services great -- drove margins higher. China did well. PC units have been strong but disproportionately driven by the low end. Macs are about 2x the average selling price of the average PC."
And some more color from Shannon Cross of Cross Research:
“It was an extremely strong quarter, what’s likely weighing on the stock at the moment is that they didn’t give guidance. Clearly iPhone was the strength, China was up significantly, reflecting that consumers in China were waiting for 5G iPhones.”
“As always, there are questions about the sustainability of the App Store and services. Clearly the strength this quarter shows continued solid growth.”
“Apple is continuing to benefit from work from home. Keep in mind last time there was a stimulus, iPhone shipments increased.”
One final potential disappointment: Apple once again didn’t provide investors with a forecast for the current period. That’ll make every statement on the earnings call all the more important as analysts will beg for a clue as to what to project going forward.
Perhaps indicative of just how priced to perfection Apple was, however, the stock has barely budged and after some initial kneejerk moves both lower and higher, it was virtually unchanged from the close.
Indeed, as Bloomberg explains the lack of reaction, "expectations had been sky high for the company on suggestions of a new iPhone “super cycle,” spurring a stock surge in recent months. Apple also recently introduced other new devices, including an updated Apple Watch, and demand increased for iPads, Mac computers and services from consumers working and studying from home during the pandemic."
So yes - amazing quarter, but not that amazing to push the stock to a new permanent plateau.
How is Jan 27, 2021 “Q1”?
That slave labor sure is good for the bottom line, isn’t it Ted?
Everybody...stop buying phones from Apple (domestic enemy)
Apple's fiscal year starts in October.
Even with this good news, Apple is down 3% in the after hours market. Ouch!
Who in China is able to purchase the iPhone?
Lemme guess...
hmmm....
perhaps its the Chinese government, trying to make sure that Apple keeps their factories in China. It’s the same kind of trick that Hillary and other lib book writers use to give the perception that their books are popular and that people care about what they write.
Apple *PING*
Geez, again? Seems like some bullsquat lies never go away, they just recycle, and recycle, and recycle...
Fair enough. Ain't freedom of choice great?
Enjoy it while you can, the new administration and their love of Bernie's "Who needs 20 kinds of deodorant" is looking to make it but a fond memory.
Interesting supposition. It ought to be verifiable, since if that's where the iPhones are going, nobody is using them, nobody is making calls or running apps, they're just sitting dead in a pile in some warehouse.
Do you have a way to substantiate your speculation?
If you want on or off the Apple/Mac/iOS Ping List, Freepmail me.
Strange that Apple and Foxconn have just announced that even more of Apple IPhone assembling is being shifted to Vietnam and India.
It isn’t. It’s the day they report the finalized, audited results of 1st quarter fiscal 2021, which ended December 26, 2020. We’re are currently in the first month of the 2nd fiscal quarter for Apple which will end on Saturday March 27, 2021.
Apple’s fiscal year runs from the 5:00pm on the last Saturday in September until 5:00pm of the last Saturday of September in the next year. Fiscal year 2020 ended for Apple on September 26, 2020. Thus the first fiscal quarter of fiscal year 2021 runs from that Saturday of September 26, 2020 through the last Saturday of December 26, 2020 at 5:00pm.
5 pm in what Time Zone?
Despite that, AAPL plunges over 3% in after hours - perhaps Xiden’s planned massive tax increase and ‘mark to market’ plus FTTs has more to do with it than valuation of the company itself.
Speculation based on the population of China, which is mostly poor
How many people in China can afford a $1500 device?
—
You do know that of the 1.45 billion people living in China, that over 315 million are millionaires or better? And a substantial portion of the rest are well to do or average? That the poor are to be found in the rapidly declining rural population?
So “mostly poor” is a complete misrepresentation.
How many Chinese can afford iPhones? Millions many millions; other brands selling well are priced even higher
Well lets put it this way millions of tourists, travelers, merchants, corporations, western residents all say the same thing as to the moneyed Chinese (who are principally from the political class) that they are in the millions and millions - you can believed the China of the 1950s is the reality, if you please.
You need to actually see modern China so here’s a link to videos by fellow that lived there for 10 years, until Xi Jinping made life intolerable
laowhy, his handle, means foreigner
https://www.youtube.com/channel/UChvithwOECK5g_19TjldMKw
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