Apple Inc. (AAPL) – Get report Shares jumped to a new all-time high on Friday, trading firmly above the $ 400 mark for the first time, after the tech giant posted extraordinary profits in the third quarter as stores closed off triggered by a pandemic. and disruptions to the supply chain.
Apple said earnings for the three months ending June, the group’s fiscal third quarter, increased 25.9% from the same period last year to $ 2.58 per share, well ahead of the consensus forecast of $ 2.05 per share for Street. The group’s revenue increased 13.4% to $ 59.7 billion, with gains in all geographic regions and across the product line.
IPhone revenue increased 2% from last year to a forecast of $ 26.4 billion, despite headwinds of COVID-19, thanks in part to a strong debut for the iPhone SE of $ 399, which is launched earlier this year. Meanwhile, iPad and iMac sales increased 22% and 31%, respectively, as work from home fueled computer purchases. Service revenue was set at $ 13.2 billion, just below Apple’s recent record and 15% more than last year.
“We are very satisfied with how we did it on the iPhone. It was better than we thought largely because May and June were much better. If you look at the iPhone in its entirety, what makes me very optimistic is the size of the installed base active, “Apple CEO Tim Cook told investors in a conference call Thursday night.
“The installed base is growing and the numbers of new clients are still very high and that, for me, augurs well for the future,” he added. “Clearly, as we have indicated, there is a certain amount of work from home and remote learning that positively affects the results of Mac and iPad.”
“They probably affect portable devices and the iPhone in the other direction. And, but on Mac and iPad, these are productivity tools that people use to stay committed to their work or stay committed to their school work,” Cook said. . “And we think we are going to have a strong back-to-school season. Sitting here today certainly looks like this.”
Apple shares were marked up 6.2% more in early trading on Friday to change hands at $ 408.35 each, a move that would expand annual stock profit to around 40% and value the headquartered company. in Cupertino, California, at about $ 1.78 billion.
However, the impact of the shares on the Dow Jones Industrial Average will lessen next month after the group announced a four-for-one stock split to take effect on August 31. 7% at $ 410 per share adds about 185 points to the Dow. A profit similar to $ 110 per share would add just 46 points to the price-weighted average.
Apple declined to offer a short-term earnings forecast, “given the uncertainty across the globe” and the continuing impact of COVID-19, but noted that it expects to see continued earnings for the iPhone, despite likely delays from ” a few weeks away “for its iPhone 12 launch in September.
“Management anticipates continued double-digit growth for all hardware products, except iPhones, during the fourth quarter / F20 with iPhones facing comparable difficult growth combined with new product launches coming a few weeks later or now in the December quarter, “said Canaccord Genuity analyst T. Michael Walkley, who has a buy rating with a target price of $ 460 a share.
“Starting in Q1 / F21, we believe Apple is well positioned to benefit from the 5G update cycle, and we anticipate strong iPhone growth to contribute to overall growth trends as 5G smartphones increase and Apple continues to increase its base. installed and higher income margin services, “he added. “Apple’s ecosystem approach, which includes an installed base that exceeds 1.6 billion devices worldwide, should continue to generate strong service revenue, and we expect higher-margin service revenue growth to outpace total growth. of the company. ”
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