Apple (AAPL) outcomes Q1 2021

Apple posted its highest-grossing quarter of all time on Wednesday, with $ 111.4 billion in its earnings report for the first quarter of fiscal 2021. It was the first time that Apple exceeded the symbolic mark of $ 100 billion in a single quarter , and sales increased 21% year over year.

Apple stock fell 2% in extended trading.

Apple’s results for the quarter ended December were not just driven by 5G iPhone sales. Sales for each product category increased by double-digit percentage points. Apple’s earnings per share and revenue significantly exceeded Wall Street’s expectations.

Here’s how Apple behaved compared to refinitive consensus estimates:

  • EPS: Estimated $ 1.68 versus $ 1.41
  • revenue: $ 111.44 billion versus an estimated $ 103.28 billion, up 21% from last year
  • iPhone revenue: $ 65.60 billion versus an estimated $ 59.80 billion, up 17% from last year
  • Income from services: $ 15.76 billion versus an estimated $ 14.80 billion, up 24% year over year
  • Sales of other products: $ 12.97 billion versus an estimated $ 11.96 billion, up 29% year over year
  • Mac earnings: $ 8.68 billion versus an estimated $ 8.69 billion, up 21% year over year
  • iPad revenue: $ 8.44 billion versus an estimated $ 7.46 billion, up 41% from last year
  • Gross margin: 39.8% versus 38.0% estimated

According to Tim Cook, Apple’s CEO, the results could have been even better if it hadn’t been for the Covid-19 pandemic and lockdown that forced Apple to temporarily shut down some Apple stores around the world.

“If you take business out of the equation, especially for iPhones and wearables, it hurts sales,” Cook told CNBC’s Josh Lipton.

According to Cook, Apple’s total installation base for iPhones is over 1 billion versus the previous data point of 900 million. The total active install base for all Apple products is 1.65 billion.

Apple has not presented any official guidance for the coming quarter. No investor forecasts have been made since the beginning of the pandemic.

But even the lack of instructions couldn’t diminish a blowout quarter for the iPhone manufacturer. Apple has benefited from the surge in PC and gadget sales during the pandemic as people working from home or going to school due to lockdowns try to update the devices they are using.

Apple released new iPhone models in October. The four iPhone 12 models are the first with 5G that investors believed could spark a “super cycle” of users asking for an upgrade. IPhone sales increased 17% over the same period last year.

“They’re full of features that customers love and they came at just the right time where 5G networks were,” said Cook.

Apple’s other product category, which includes Apple Watch and headphones like AirPods and Beats, rose 29% year over year to $ 12.97 billion, even though people spend less time commuting and traveling. Apple released high-end headphones with a suggested price of $ 549 in December, the AirPods Pro Max.

Macs and iPads, the Apple devices most likely used for remote work and schools, were also up this quarter. Apple released new Mac computers with their own chips instead of Intel processors in December. Positive reviews said they were superior to the old models in terms of performance and battery life.

Apple’s service business, which the company has highlighted as a growth engine, grew 24% year over year to $ 15.76 billion. This product category is a panacea: it includes the money Apple makes on the App Store, subscriptions to digital content like Apple Music or Apple TV +, license fees paid by Google as the default search engine for the iPhone, and AppleCare guarantees.

Apple highlighted in its press release that international sales represented 64% of the company’s sales, up from 61% in the year-ago quarter.

How new iPhone models hold up in China, the company’s third largest market, is a constant topic of discussion among investors. Sales in what Apple calls Greater China, which includes Taiwan and Hong Kong, rose nearly 57% to $ 21.3 billion.

“China has been strong across the board,” said Cook.

Apple also declared a cash dividend of $ 0.205 per share and said it had spent over $ 30 billion on total shareholder return during the quarter, including share buybacks. Apple’s first fiscal quarter is typically the largest of the year and includes critical Christmas sales in December.

Wednesday’s blowout gains are a recovery story for Apple too. Two years ago, Apple warned that the vacation quarter revenue forecast was lower than the company expected. That rare warning raised questions about whether Apple is losing momentum. On Wednesday, Apple announced that sales have increased over 32% since that report.

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