Record Mac sales helped Apple Inc. make up for a lack of new iPhones in its fiscal fourth quarter, as the COVID-19 pandemic continued to drive surging demand for remote-work tools.
iPhone business fell short in the September quarter, Apple managed to beat overall expectations in a Thursday earnings report due in part to resurgent Mac sales. Mac revenue of $9 billion came in more than $1 billion ahead of what analysts were expecting amid a growing need for products that make working and studying from home easier.
Still, shares fell 5.2% in after-hours trading Thursday, as Apple again declined to provide a financial forecast amid the pandemic. Investors and analysts were hoping for guidance that would give a clearer idea of what holiday sales of the new iPhones could look like, after a COVID-19-related delay forced the new smartphones to start selling later than is typical for Apple.
Chief Financial Officer Luca Maestri said on Apple’s earnings call that the company expects growth in iPhone revenue for the December quarter “despite shipping iPhone 12 and 12 Pro four weeks into the quarter and iPhone 12 mini and 12 Pro Max seven weeks into the quarter.” He also anticipates that “all other products in aggregate” will grow by double digits, as will the services business.
Though Apple’s revenue in Greater China slipped to $7.95 billion from $11.13 billion in the September quarter, Chief Executive Tim Cook said on Apple’s call that the company is “confident that [it] will grow this quarter in China.”
Apple’s upbeat Mac results for the September quarter are in line with general personal-computer industry trends, with third-party analysts at Gartner and IDC pointing to the strongest growth in more than a decade for the PC market. The company seemed to see a benefit from school systems, as Cook called out that the company started nine of its 10 largest school deployments yet that will support more than 1 million students and teachers.
In many other years, Apple’s fiscal fourth quarter has received a jolt from early sales of the company’s latest iPhone models. Apple delayed its iPhone 12 launch due to the COVID-19 crisis this year, but the rest of the business stepped up as Apple beat expectations across its other four product categories.
Apple’s total revenue for the quarter rose to $64.7 billion from $64.04 billion a year ago, while analysts surveyed by FactSet were modeling $63.7 billion. The company posted net income of $12.67 billion, or 73 cents a share, down from $13.68 billion, or 76 cents a share, in the year-earlier quarter. Analysts tracked by FactSet were modeling 71 cents a share in earnings.
Apple saw iPhone revenue slip to $26.44 billion — – short of the $28.08 billion that analysts surveyed by FactSet were modeling — from $33.36 billion in the year-prior period, which included some sales of new models.
Revenue from iPads rose to $6.8 billion from $4.66 billion, while revenue from Macs climbed to $9.03 billion from $6.99 billion. Apple’s newest entry-level iPad model became available at the tail end of the September quarter. Analysts surveyed by FactSet were modeling $6.02 billion in iPad revenue and $7.82 billion in Mac revenue.
Apple’s sales from wearables, home and accessory products increased to $7.88 billion from $6.52 billion in the prior-year quarter, coming in above estimates for $7.17 billion. Services revenue jumped to $14.55 billion from $12.51 billion, while analysts were calling for $14.11 billion.
Apple’s overall revenue was a record for the September quarter. The company said in its release that services and Mac revenue hit “new all-time high[s].”
The smartphone giant declared a dividend of $0.205 a share, which is payable Nov. 12 to shareholders of record as of the close of business Nov. 9.
Shares of Apple have risen about 59% so far this year as the Dow Jones Industrial Average
of which Apple is a component, has declined roughly 6%.