MacDailyNews presents live notes from Apple’s Q221 Conference Call with analysts starting at 5pm EDT / 2pm PDT today, April 28, 2021.
Apple today will provide live audio streaming of its Q221 Results Conference Call. This stream is best experienced on an iPhone 7 or later, iPad (5th generation or later), or iPod touch (7th generation) using Safari on iOS 12 or later; or a Mac using Safari on macOS Mojave 10.14 or later. Streaming to your TV requires an AirPlay 2–capable device, or via AirPlay to an Apple TV (2nd generation or later) with the latest Apple TV software or tvOS. Other platforms may also be able to access the stream using recent versions of Chrome, Firefox, or Microsoft Edge (MSE, H.264, and AAC required).
Apple’s live conference call webcast will begin at 5pm EDT / 2pm PTD today here.
Apple today posted all-time record second quarter revenue of $89.6 billion, up 54% year over year, and quarterly earnings per diluted share of $1.40 (vs. $0.64 YOY).
For the quarter, Refinitiv consensus estimates expected Apple to post revenue of $77.36 billion and EPS of $0.99.
Live notes from Apple’s Q221 Conference Call in reverse chronological order:
• End of conference call.
• Apple will never underinvest in its business
• A lot of Apple TV+ production is U.S. based
• Apple’s commitment to U.S. suppliers grows over time
• Apple has invested in job creation at Apple
• Q: Investment plans for $430 billion in U.S. over the next five years?
• We’re very pleased with results in India, Russian, Middle East
• iPad and Mac grew very strongly in Europe as the continent was affected by prolonged COVID-19 lockdowns
• Luca: We had 56% growth in Europe; results better than our expectations
• Q: Performance by geography?
• Cook: People should be able to choose if they want to be tracked or not
• Cook: ATT puts the user in control; feedback from users has been tremendous
• Q: Any initial feedback on App Tracking Transparency (ATT) from developers?
• Cook: As Retail Stores get fully back up to speed, accessory sales will do even better
• People like to see and try on Apple Watch / bands
• Cook: We get a lot of benefits from our Retail Stores
• Q: Accessories attach rate for Apple Watch and AirPods?
• Cook: App Store curation is very important for privacy and security
• Cook: We are flexible on App Store; we continue to learn and refine
• Cook: If we feel that more disclosure would help, we’d move in that direction
• Q: Regulatory scrutiny?
• About 2/3rd of customers in China are new to iPad and new to Mac
• Apple has the top 2 bestselling smartphones in urban China
• Especially pleased with response to iPhone 12 family in China
• Cook: Set Q2 record in China
• Q: Which hardware and services drove China?
• Cook: We don’t predict, but the $3B – $4B hit due to semiconductor shortage will affect primarily Mac and iPad
• Q: With economy reopening, what do youexpect for Mac and iPad for 2H?
• Cook: We did not have a material supply shortage in Q2
• Q: Semiconductor supply?
• Cook: Most of the issues are on legacy nodes (many other companies also use, so it’s very difficult to know when it will ease)
• Q: Semiconductor supply, when will it ease?
• Cook: We’re really happy with the iPhone 12 family results
• Cook: iPhone 12 is the most popular, iPhone 12 and 12 Pro Max saw very strong sales as well
• Q: iPhone mix?
• Last three quarters of Mac have been the best three quarters ever for Mac, so demand is very high
• Luca: Supply constraint is due to the worldwide semiconductor shortages
• Luca: Normal seasonality will be higher due to component shortages and iPhone demand/supply balance
• Q: Supply constraints?
• Cook on pricing: We try to give the customer a great value.
• Cook: To date, Apple TV+ content has received 352 award nominations with 98 wins
• Cook: Apple TV+ is going very well. Philosophy is to create high quality original content
• Q: Product pricing? Apple TV+?
• Luca: We wish we had more inventory on Mac and iPad, but it is what it is
• Luca: Q3 will be affected by iPhone reaching supply/demand balance in Q2 and $3B – $4B hit due to component shortages (affecting Mac and iPad, primarily)
• Q: Inventory?
• Work-from-home overall, for business worldwide, will remain to some extent, even post-COVID
• Cook: Mac demand and iPad demand feels very strong right now
• Component shortages in Q3 affect primarily the iPad and the Mac
• Results were fabulous acrodd the board
• Keep in mind that the compare in to COVID-19 shutdown quarters
• Cook: If you look at the different products: iPhone has great momentum
• Q: This was an unbelievable quarter, is it sustainable?
• Cook: 5G cycle is important and we are int he early days of it.
• Cook: It is difficult this early into the cycle, but we are clearly happy with the direction
• Cook: We are clearly seeing strong performance to new-to-iPhone (switcher) and iPhone upgraders
• Q: Replacement cycle for iPhone?
• Apple feels “very good” about the Services segment
• AppleCare returned to growth as Retail Stores reopened
• Luca: Better than expected in Q2, stronger across the board; COVID drove usage
• Q: What’s driving Services?
• Margins driven by cost savings, strong mix, especially on iPhone, and foreign exchange was favorable 90 basis points
• Luca: Similar, slightly lower levels, for Q3
• Q: 42.5% Gross margin, what’s driving that?
• 5G penetration is still low, so there is a lot of headroom for 5G upgrades ahead
• Cook: We saw double-digit increase in upgraders and new to iPhone customers during the quarter
• Q: Refreshing iPhone base and attracting new customers?
• Q&A
• $3B – $4B impact due to supply constraints in Q321
• No revenue guidance due to COVID-19 uncertainty
• Apple continues to plan for dividend increases over the coming years
• The board of directors has also authorized an increase of $90 billion to the existing share repurchase program
• The dividend is payable on May 13, 2021 to shareholders of record as of the close of business on May 10, 2021
• Apple’s board of directors has declared a cash dividend of $0.22 per share of the Company’s common stock, an increase of 7 percent
• Net cash $83 billion
• Total debt $122 billion
• Apple ended quarter with $204 billion in cash and marketable securities
• Apple continues to see growth in the enterprise
• 451 Research: U.S. Customer Satisfaction for iPad is 94%
• 451 Research: U.S. Customer Satisfaction for Mac is 91%
• M1 Macs saw strong reception
• Mac set records around the world
• Mac: $9.102 billion (vs. $5.351 billion YOY)
• Apple Watch continues to extend reach with over 75% of buyers new to the category
• Apple Arcade received it’s biggest update ever
• Apple now has over 660 million paid subscriptions across all Services
• Paid acounts increased double digits in each of Apple’s geographic segments
• Apple subscription services continue to grow
• 451 Research: U.S. Customer Satisfaction for iPhone 12 family is over 99%
• iPhone 12 family saw strong demand
• iPhone: $47.938 billion (vs. $28.962 billion YOY)
• International sales accounted for 67 percent of the quarter’s revenue.
• Installed base of active devices reached new all-time record in each of Apple’s major product categories
• Luca: All-time record for Services
• Cook on COVID-19: “We can have confidence that the ending will be a good one.”
• Cook warns of challenge of emerging from the various responses to COVID-19 around the world
• Apple will invest $430 billion in American economy over the next 5 years, including a new North Carolina campus
• Apple looks forward to WWDC 2021
• Cook recaps Apple’s myriad environmental efforts
• Apple TV+ continues to reap award nominations, especially Ted Lasso
• Cook touts App Tracking Transparency privacy controls for users
• Cook recaps recent announcements, such as Apple Card Family
• Services: $16.901 billion (vs. $13.348 billion YOY)
• Cook talks up AirTag and Find My network
• The last three quarters have each been records for mac sales
• Fueled by the M1, the Mac set an new all-time quarterly revenue record
• Wearables, Home and Accessories revenue: $7.836 billion (vs. $6.284 billion YOY)
• iPad: $7.807 billion (vs. $4.368 billion YOY)
• Apple set new quarterly record in every geographic segment
• Tim Cook: “Apple is proud to report another strong quarter.”
• International sales accounted for 67 percent of the quarter’s revenue
• Apple reported Q221 record revenue of $89.6 billion, up 54 percent year over year
• Awaiting start of conference call
• AAPL After hours: $137.85, +$4.27 (3.20%) @ 4:52PM EDT
• AAPL After hours: $137.95, +$4.37 (3.27%) @ 4:44PM EDT
” Apple continues to plan for dividend increases over the coming years”
What a fscking joke. Apple should be humiliated at how little they pay their shareholders.
dividend is peanuts…
Just think of all of the money that Apple could put to work making better products that we all love if it would kick all speculators with their excitedly gaping mouths open, but never open enough, to get more and more dividends which they clearly don’t deserve. And Apple is now wealthy enough to no longer need those investors anyway; It can reward employees from its King Midas cash horde in escrow instead of stocks.
You don’t know how this works, do you? Forget speculators for a moment. Longtime AAPL investors, such as myself, clearly DO deserve their dividends. The whole point of owning shares in a company is to benefit from the company’s financial success. Dividends are a part of that, otherwise Apple’s bank account just grows and grows. Buying back shares is what annoys me. They should be putting that money into dividends as direct payments to the shareholders. Virtually anyone can buy shares of Apple if they have the money. For those who don’t have the money, they can start small and participate in a 401(K) or 403(b). Those who can’t participate that way (perhaps because they’re unemployed) have bigger problems that need to be addressed in other ways. Perhaps you don’t own any AAPL shares. Fine. That’s your choice (and your loss). But being ignorant about how this works is also your choice, and that’s something you can fix by educating yourself. You can start by learning why “Apple is now wealthy enough to no longer need those investors anyway” is a complete misstatement of fact. It doesn’t work the way you seem to think it does. Good luck.
Apple does not need your investment so don’t pretend that you are some important part of Apple’s process.
I’ll be the first to agree that my Apple investment is more important to me than it is to Apple, so I’m not pretending anything. But you’re being (or pretending to be) obtuse. Back to the original point. Is it that you don’t understand the role of investors in a public company’s finances? Or that you don’t believe companies should sell shares? Or that they should sell shares but keep the profits to themselves and not pay dividends? Are you OK with buybacks, then? The more I think about what you wrote, the more confused I am.
Yes, Dingleberry is clear as mud and insulting along the way…