- Apple beat Wall Street’s expectations for its third-quarter tax earnings, reporting revenue of $ 59.7 billion.
- IPhone revenue rose 2% to $ 26.4 billion during the quarter, but the company hinted at a delay for the anticipated 5G model.
- Apple reported growth in all its product lines for the third quarter, from the iPhone, which has seen slow growth in recent years, to its booming wearables and services businesses.
- The results come just after CEO Tim Cook testified before Congress about the company’s app store policies, a significant part of Apple’s growing services business.
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Apple posted revenue of $ 59.7 billion for its fiscal third quarter, exceeding Wall Street’s muted expectations and showing growth across all product categories, including the iPhone.
Apple shares rose approximately 6% after hours, pushing the company’s stock price above $ 400 for the first time. The company also said it plans to start a 4-for-1 stock split next month to make the shares “more accessible to a broader investor base.”
Here’s a look at the key numbers:
- Third quarter income: $ 59.7 billion. Analysts expected $ 52.3 billion. In the same quarter a year ago, Apple posted revenue of $ 53.8 billion.
- Q3 earnings per share: $ 2.58. Analysts were looking for $ 2.07. In the third quarter of last year, Apple earned $ 2.18 a share.
- IPhone Income: $ 26.4 billion. Apple posted iPhone revenue of $ 25.9 billion a year ago.
- Service revenues: $ 13.1 billion. Apple’s revenue segment generated $ 11.5 billion in the same period last year.
- Wearable income: $ 6.4 billion. Apple recorded $ 5.5 billion in revenue for its wearable device business in the third quarter of last year.
Total revenue increased 11% year-over-year, which Apple said was driven by both products and services, and reflected growth in all geographic segments.
Apple did not issue a revenue guide for its fiscal fourth quarter.
Better-than-expected gains come when the pandemic has created uncertainty for Apple’s business. In its fiscal second quarter three months ago, Apple reported revenue growth of just 1%, billions below its initial guidance for that quarter, which it terminated before reporting its results. Apple did not issue guidance for its fiscal third quarter due to the pandemic.
The iPhone returns to growth
Apple’s booming wearable and service companies had previously served as bright spots in the company’s earnings reports as iPhone sales had stagnated.
But that changed in the third quarter as iPhone sales grew 2%, driven by higher demand in May and June.
Apple also cited the positive reception of the iPhone SE, the $ 400 iPhone it launched in April, as a key driver of its smartphone sales.
Analysts were looking for clues to the Apple iPhone 5G launch during the earnings call, and Apple provided that. The company said it expects the supply of a new iPhone to be available “a few weeks later” compared to the launch of the iPhone in late September last year. Apple rarely discusses unreleased products, but the company made such comments in the context of providing information about the coming quarter as it did not provide guidance on revenue.
“This year, the supply of the new product will be a few weeks later than that,” Luca Maestri, Apple’s senior vice president and chief financial officer, said in the company’s earnings call.
Growth in sales of wearable devices slowed as expected, but the segment still hit record sales for a non-holiday quarter. Services also continued to boom, with Apple reporting 15% growth, a new record for the June quarter. The results also come after a major antitrust hearing on Wednesday, in which CEO Tim Cook testified about the policies of the company’s app store, a core component of the company’s services business.
“In uncertain times, this performance is a testament to the important role our products play in the lives of our customers and to Apple’s relentless innovation,” Apple CEO Tim Cook said in a press release.
As for the mechanics of the 4-for-1 stock split, each registered Apple shareholder at the close of business on August 24 will receive 3 additional shares for each share they own. Trading will begin on a split adjustment basis on August 31.
This story is unfolding. Please update for the latest.
