Apple shares soared to an all-time high in after-hours trading, crossing the $ 400 level for the first time, after the company released second-quarter results that crushed Street estimates, and announced a stock split. 4 for 1.
Apple (AAPL) reported revenue for its fiscal third quarter ended June 30 of $ 59.7 billion, up 11% from a year ago, and well ahead of Wall Street analyst consensus at $ 52.1 billion. Earnings were $ 2.58 per share, beating the Street consensus at $ 2.09.
Product revenue increased 9.9%, while services increased 14.8%. The company showed sales increases across all major product areas, with iPhone 1.6%, Macs 21.6%, iPad 31%, and wearable devices 16.7%.
“Apple’s June quarter record was driven by double-digit growth in both Products and Services and growth in each of our geographic segments,” Apple CEO Tim Cook said in a statement. “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.”
Chief Financial Officer Luca Maestri added that the quarter was “strong evidence of Apple’s ability to innovate and execute in tough times.” He said the company’s installed active device base reached a record high in all geographic segments and all major product categories.
In a conference call with analysts and investors Thursday afternoon, Cook said Apple saw demand for iPhones better than expected in May and June. He added that Apple saw supply constraints on both iPads and Macs in the quarter amid strong demand. The growth of wearables slowed as expected. Cook said Apple doubled 2016 service revenue six months before its original end-of-year 2020 goal. He also said that the recent World Virtual Developer Conference attracted more than 22 million viewers.
The company said it now has more than 550 million paid subscriptions in its service businesses and expects to reach 600 million before the end of the calendar year.
Apple did not give financial guidance in the press release announcing earnings. CFO Maestri confirmed in the call that the company is not providing guidance on revenue or margin for the September quarter, but gave some hints. In particular, he notes that last year the company made new iPhones available in late September, but that this year the new phones will be “a few weeks later,” a veiled but notable reference to the fall launch of the first 5Gs. iPhones, which now appears to arrive in October.
Apple said its board declared a 4-for-1 stock split, effective as of August 31. This would be the fifth equity division in the company’s history, the most recent being a 7-for-1 division in 2014. The previous divisions occurred in 2005, 2000, and 1987. While the equity divisions should not have a logical impact In stock prices, investors tend to like them, and they often fuel short-term stock earnings when they are advertised.
In off-hours trading, Apple shares are up 4.6% to $ 402.73. The stock has never closed a regular trading session above $ 400. With the rally, the stock is approaching a market capitalization of $ 1.75 trillion.
Write to Eric J. Savitz at [email protected]
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