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Consumer electronics giant Apple reported better than expected September quarter earnings Thursday. Revenue from iPhones dissppointed. $AAPL did not other guidance given the COVID-related supply chain and consumer disruptions. Sales in Greater China were weak, down 28% on the year.

IPhone 8

Apple (NASDAQ: $AAPL) Reported Earnings After Close Thursday

 

$0.73 Beat $0.70 EPS Forecast AND $64.70B Beat $63.70 Billion forecast in revenue 

Earnings 

Apple reported fourth-quarter earnings on Thursday beating Wall Street expectations marginally. EPS was 73 cents vs 70 cents expected, according to Refinitiv estimates. Revenue was $64.7 billion vs $63.70 billion expected, according to Refinitiv estimates. IPhone sales dissappointed.

iPhone quarterly revenue change 04 2020

Note that Apple’s iPhones went on sale this year in October, and more models are planned for next month, meaning that sales from the new devices aren’t counted in this quarter.

Market Reaction > Apple. Nasdaq: AAPL

Market Reaction After hours 109.20▼ 6.12 (5.31%)

Highlights

  • iPhone revenue: $26.44 billion vs. $27.93 billion est.
  • Services revenue: $14.55 billion vs. $14.08 billion est.
  • Other Products revenue: $7.88 billion vs. $7.40 billion est.
  • Mac revenue: $9.0 billion vs. $7.93 billion est.
  • iPad revenue: $6.8 billion vs. $6.12 billion est.
  • Gross margin: 38.2% vs. 38.1% est.
  • Sales in China were a weak point for Apple. Sales in greater China, which includes Hong Kong and Taiwan, dropped to $7.95 billion from $11.13 billion a year before, over a 28% decrease.
  • “A larger percentage of China revenue is made up of new iPhones. And so that’s the reason the number for the total quarter started with a minus sign. But given what we see in the early going with the new iPhones, we’re confident we’ll grow in Q1,” Cook told CNBC.

AAPL Earnings Q4 2020

Outlook

“If you look at the case count, the case counts are climbing in Western Europe. They’re climbing in the United States. And so there’s still a sufficient level of uncertainty out there… we don’t believe that’s an environment to guide into,” Apple CEO Tim Cook told CNBC’s Josh Lipton.

While not offering guidance Apple CEO Cook said  "This Year Has A Few More Exciting Things In Store ... Very Optimistic About The iPhone 12"

On Friday, Apple will release bundles of its subscription services called Apple One, Reuters reported. The bundles vary by region but include Apple Music, iCloud storage, and Apple TV+ streaming video.

Stock Split

Apple announced in its fiscal third-quarter earnings that the Board of Directors has approved a four-for-one stock split.

The shares will be distributed to shareholders at the close of business on August 24, and trading will begin on a split-adjusted basis on August 31. That means that, for each share of Apple stock that an investor owns, they’ll receive three additional shares. It also makes single shares in Apple more affordable for investors to buy. It follows a similar move Apple made in 2014, when it offered a 7-to-1 stock split.At the time, Apple was trading above $600 per share. The split brought shares of Apple to about $92 a share.

This is Apple’s fifth stock split since it went public. It also split on a 7-for-1 basis on June 9, 2014; a 2-for-1 basis on February 28, 2005; a 2-for-1 basis on June 21, 2000; and on a 2-for-1 basis on June 16, 1987.

 

Source: Apple, TradersCommunity, AlphaStreet

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