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Apple smashes revenue estimates in record third quarter

CEO Tim Cook
Apple Inc. CEO Tim Cook delivers the keynote address during the 2020 Apple Worldwide Developers Conference on June 22 in Cupertino, Calif.
(Brooks Kraft/AP)

Apple Inc. reported quarterly revenue that crushed Wall Street forecasts after locked down consumers snapped up new iPhones, iPads and Mac computers to stay connected during the pandemic. The stock jumped as much as 6.3% in extended trading.

The world’s largest technology company also announced a four-for-one stock split after its shares surged more than 80% in the last year, and confirmed that the next iPhones will launch a “few weeks later” than usual.

Fiscal third-quarter revenue came in at $59.7 billion, a record for the June period, Apple said in a statement. That was up 11% from a year earlier and smashed analysts’ estimates of $52.3 billion, according to data compiled by Bloomberg.

The pandemic is keeping people at home, which has spurred demand for Apple devices to help millions of consumers use the internet to keep in touch with friends, family and co-workers.

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“In uncertain times, this performance is a testament to the important role our products play in our customers’ lives,” Apple Chief Executive Tim Cook said in a statement.

The pandemic probably boosted iPad and Mac sales because of lockdowns and an increase in remote learning, while Apple store closures are weighing on iPhone sales, Cook said in an interview with Bloomberg TV.

Apple’s cheaper iPhone SE, released in April, was also well timed for leaner economic conditions. There were also minor updates to the iPad Pro and MacBook Pro, and new accessories such as an iPad Pro keyboard with trackpad. The company plans to launch new Mac computers with its own processors, a cheaper HomePod, and a slew of new iPhones later this year.

During a conference call, Chief Financial Officer Luca Maestri said the new handsets will be slightly delayed this year, suggesting an October launch.

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The Cupertino, Calif.-based technology giant didn’t provide guidance again because of the ongoing effects of COVID-19.

Revenue from the iPhone was $26.4 billion, beating analysts’ expectations of $21.3 billion. IPad revenue was $6.6 billion, a strong increase from $5 billion a year earlier, while the Mac brought in $7.1 billion, another big jump from $5.8 billion in the same period of 2019.

Services, a category that includes the App Store, Apple Music and iCloud subscriptions, generated sales of $13.2 billion, up from $11.5 billion a year ago and roughly in line with Wall Street expectations. The company said it has more than 550 million paid subscriptions and is on track to reach 600 million by year’s end.

Cook said some services, including AppleCare repairs and advertising, were negatively affected by the pandemic. The virus has also paused production of Apple TV+ shows shot in Los Angeles, the CEO added. Still, he cited record revenue for the App Store, Apple Music, video products and cloud services.

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The June quarter also included earnings per share of $2.58, an 18% increase, and a record for the company’s installed base of active devices.

Apple’s Wearables, Home and Other Products category, a segment that includes the Apple Watch and AirPods, brought in $6.5 billion in revenue. That beat Wall Street predictions of $6.1 billion.


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