Apple Blows Past Estimates with Earnings Report

January 28, 2021
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Earlier this week it was speculated that Apple Inc. (NASDAQ: AAPL) would eclipse its previous earnings record and report its first-ever $100 billion quarter. As expected, Apple has done exactly that, but the final numbers were even better than analysts had predicted.

Here are all the details that investors need to know from last night’s earnings call.

Apple Breaks $100 Billion in Revenue for the First Time

Wall Street analysts set an average revenue target of $103.30 billion for Apple. When the company reported earnings last night, the real number was even more impressive.

The company’s holiday quarter generated revenue of $111.4 billion, with earnings of $16.80 per diluted share. Earnings were up 35% from 2019’s holiday quarter. This is the first time that Apple has reported more than $100 billion in revenue from a single quarter, putting it in an exclusive position and cementing its place as the most valuable publicly traded company in the world.

The iPhone was the star performer in Apple’s blowout quarter. It now has a global install base of over 1 billion devices. iPhone sales in the holiday quarter increased by 17%, driven largely by new 5G models that take advantage of the latest cellular networks. Even Apple itself had only predicted single-digit growth in its iPhone segment.

Apple CFO Luca Maestri said in a statement to investors that there was “double-digit growth” in every product category. This means that Apple saw its revenue increase for new segments like its exclusive credit card, Apple TV+, and its expanding line of smartwatches.

The company has now confirmed a $0.204 per share cash dividend for shareholders which will be paid on February 11.

The iPhone 12 is the First Must-Buy in Years

Apple’s iPhone segment has underperformed in some recent years. The new 5G iPhone 12 represents its most successful handset release in over five years. Because the latest model leverages new cellular technology that brings faster data speeds with lower latency, it is considered a must-buy. Apple customers who had avoided upgrades in recent years can now see tangible benefits from purchasing the latest and greatest iPhone.

The iPhone and other hardware devices like the Apple Watch Series 6, iPad, and iPad Air made up the bulk of Apple’s revenue in the holiday quarter, contributing $95.7 billion. This means that there’s still plenty of potential for Apple to better monetize its services.

Stock Pulled Back on Wednesday

Apple stock was down in after-hours trading, despite the record-breaking holiday quarter. This was part of a wider market pullback. Most analysts believe this stock is still a great value. With the most bullish estimate on FactSet predicting a price as high as $175.00, now could be a great time to invest in Apple’s performance today and its future growth potential.

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