Apple beats the Street with record first quarter results

Apple today announced financial results for its fiscal 2020 first quarter ended December 28, 2019. The Company posted quarterly revenue of $91.8 billion, an increase of 9 percent from the year-ago quarter and an all-time record, and quarterly earnings per diluted share of $4.99, up 19 percent, also an all-time record. International sales accounted for 61 percent of the quarter’s revenue.

Apple record results“We are thrilled to report Apple’s highest quarterly revenue ever, fueled by strong demand for our iPhone 11 and iPhone 11 Pro models, and all-time records for Services and Wearables,” said Tim Cook, Apple’s CEO, in a statement. “During the holiday quarter our active installed base of devices grew in each of our geographic segments and has now reached over 1.5 billion. We see this as a powerful testament to the satisfaction, engagement and loyalty of our customers — and a great driver of our growth across the board.”

“Our very strong business performance drove an all-time net income record of $22.2 billion and generated operating cash flow of $30.5 billion,” said Luca Maestri, Apple’s CFO, in a statement. “We also returned nearly $25 billion to shareholders during the quarter, including $20 billion in share repurchases and $3.5 billion in dividends and equivalents, as we maintain our target of reaching a net cash neutral position over time.”

Net sales by category:
• iPhone: $55.957 billion
• Wearables, Home and Accessories: $10.010 billion
• Services: $12.715 billion
• Mac: $7.160 billion
• iPad: $5.977 billion

Apple is providing the following guidance for its fiscal 2020 second quarter:

• revenue between $63.0 billion and $67.0 billion
• gross margin between 38.0 percent and 39.0 percent
• operating expenses between $9.6 billion and $9.7 billion
• other income/(expense) of $250 million
• tax rate of approximately 16.5 percent

Apple’s board of directors has declared a cash dividend of $0.77 per share of the Company’s common stock. The dividend is payable on February 13, 2020 to shareholders of record as of the close of business on February 10, 2020.

Apple will provide live streaming of its Q1 2020 financial results conference call beginning at 2:00 p.m. PT on January 28, 2020 at www.apple.com/investor/earnings-call/. This webcast will also be available for replay for approximately two weeks thereafter.

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Here’s what Wall Street was expecting, according to Refinitiv:

• EPS: $4.55
• Revenue: $88.50 billion
• iPhone revenue: $51.62 billion
• Services revenue: $13.07 billion
• Wearables, Home and Accessories: $9.52 billion
• Mac revenue: $7.15 billion
• iPad revenue: $6.70 billion
• Q2 revenue guidance: $62.45 billion
• Q2 margins guidance: 38.2%

19 Comments

  1. Apparently, a lot of people are surprised at the growth in iPhone in China. They really shouldn’t be.

    I tried explaining in another post that in China, iPhones are a status symbol. Features and price don’t really matter. They just need to VISUAL changes to the design with each new model because none of the locals want to be seen with “last year’s model”. When there are no visual changes to the designs, that’s when sales lag.

    That being said, why shouldn’t AAPL be valued like a growth company. There’s still room for iPhone to grow. The Wearables division didn’t even exist 5 years ago and, today, it’s larger than Starbucks.

    As a side note, I’d love to see Apple start using AMD CPUs to bring bring Mac prices down. There’s no reason why the Mac division can’t grow. They just have to stop pricing themselves out of shoppers’ budgets.

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