On Wednesday, Apple reported that its blowout 2020 holiday quarter (fiscal Q121) broke nearly every one of its financial records. Revenue of $111.4 billion, up 21% from last year and $8 billion more than analysts had expected, was a record. Profits of $28.8 billion, up 29%, was also a record, as were the sales totals in every geographic region and in most product categories. And, yet, Apple’s stock price dropped.
After posting all of the record results, Apple’s shares slumped more than 3% in afterhours trading to $137.67.
Part of the problem on Wednesday was that CEO Tim Cook and CFO Luca Maestri tamped down expectations for the current quarter. Apple, citing the COVID pandemic, again decided not to provide the kind of precise revenue forecast for the quarter starting 2021 that it did before the pandemic. Maestri did say that Apple’s wearables and accessories business would “decelerate” and that its services business was particularly strong in 2020, so this year “faces a tougher year-over-year comparison.”
Another issue is that Apple’s next big move isn’t yet visible to outsiders. Reports suggest the company is working on electric cars and virtual reality gear, each of which could open another significant market for CEO Cook and his team to conquer over the next decade.
But Cook didn’t give anything away on Wednesday, despite a lot of prodding by analysts during a conference call.
MacDailyNews Take: As it ever was. Investors will wake up eventually as Apple remains woefully undervalued.