Improved sales of iPhones pushed Apple’s fourth-quarter financial results above expectations.
Kif Leswing reported the news for CNBC:
Apple reported revenue and profit significantly higher than what Wall Street analysts expected and spiked as much as 3% before settling down up around 1% in after-hours trading.
Apple’s revenue was up 9% to $91.8 billion, which beat its own guidance. That’s a significant change from the same quarter last year when it had to revise its revenue guidance down mid-quarter based on weakness in China.
Apple’s earnings were partially powered by iPhone revenue, which was up 8% on the strength of new iPhone models to $55.96 billion.
“It was sort of a blockbuster quarter all the way around,” Apple CEO Tim Cook told CNBC’s Josh Lipton.
However, Apple’s range of guidance for next quarter is wider than typical, a change that Cook attributed to uncertainty caused by the deadly coronavirus, which has shut down travel in parts of China.
“As you can see from the range, anticipates some level of issue there. Otherwise, we would not have a $4 billion range,” Cook said.
Cook said that Apple’s “Greater China” segment, which also includes Taiwan and Hong Kong, had returned to growth in the quarter, which ended in December.
Jeremy C. Owens from MarketWatch wrote:
Apple Inc. delivered record quarterly earnings and revenue Tuesday that beat expectations and sent the stock higher in extended trading.
The results were headlined by blockbuster quarter of iPhone sales and the first-ever $10 billion quarter for Apple’s AAPL, +1.99% wearables, home, and accessories category, which includes the Apple Watch and AirPods, both strong holiday sellers.
The company also delivered an upbeat view of the current quarter while indicating that the coronavirus outbreak gives the company less visibility than it would normally have. Apple has alternate supply sources for its manufacturers located in Wuhan but will be monitoring what happens with factories outside the city.
Executives also provided more information about how the company will account for free trials of its new Apple TV+ streaming service.
Clare Duffy from CNN noted:
With the iPhone 11, Apple returned to basics, producing its cheapest phone in years with a stellar camera and some improvements over the somewhat derided iPhone XR that preceded it. The iPhone 11 was Apple’s bestselling smartphone during the last three months of 2019, CEO Tim Cook said on a conference call with investors.
That helped overall iPhone sales grow by nearly 8% to $56 billion in the quarter. It didn’t quite hit a record (in the three months ending in December 2017, Apple sold $61 billion worth of iPhones), but it was a robust turnaround for a product that was in a serious slump: IPhone sales had fallen in each of the previous four quarters.
“In 2019, the story was really Apple’s efforts to diversify its business from the iPhone,” D.A. Davidson, senior analyst Tom Forte, told CNN Business Tuesday. “In the December quarter and calendar 2020, it’s really a story of the resurgence of the iPhone, or the iPhone exceeding expectations.”
However, Forte cautioned that Apple could struggle to maintain its stock momentum this year. The iPhone 11, he said, “had the lowest expectations of any iPhone ever.” But this year, when Apple is widely anticipated to release 5G-enabled phones, expectations are much higher.
“The additional upside in the stock is clear. The ability to execute on it, to be determined,” Forte said.
