News from Cupertino: Apple (AAPL) reported to the SEC with revenue and profit much higher than what the street expected. Prices spike as much as 3% but ended up at 1% in after hours trading.
Apple even beat its internal guidance. The company brought in $91.8 billion, which was a 9% increase. In a stark comparison, the first quarter of 2019 Apple had to revise its revenue guidance downward due to issues in China.
Iphone sales and revenue increased 8% which gave a big boost to the company’s numbers. New models buoyed sales with revenue totalling $55.96 in the iphone segment alone.
“It was sort of a blockbuster quarter all the way around,” Apple CEO Tim Cook told CNBC’s Josh Lipton.
Here’s how Apple did compared to Refinitiv consensus estimates:
- EPS: $4.99 vs. $4.55 estimated
- Revenue: $91.8 billion vs. $88.50 billion estimated
- iPhone revenue: $55.96 billion vs. $51.62 billion estimated
- Services revenue: $12.7 billion vs. $13.07 billion estimated
- Other products revenue: $10 billion vs. $9.52 billion estimate
- Gross margin: 38.4% vs. 38.1% estimated
- Q2 revenue guidance: $63 billion to $67 billion vs. $62.45 billion
- Q2 margin guidance: 38% to 39% vs. 38.2%
The deadly coronavirus may have negative affects on the next quarter. The people of China are being advised to stay home and not travel through the Chinese New Year. Time will tell if manufacturing and retail sales pick back up or if employees are asked to stay home longer than usual.
The range of guidance for next quarter is wider than we typically see for Apple.
More than Iphones
In recent months, investors have been paying more attention to the segment of apple called “Other Products.” The Other Products category includes Apple Watch and AirPods. Representatives at apple have said they couldn’t make enough of these products. Time will tell when this market saturates, but it seems like there is high demand.
The other products category did $10 billion in sales during the first quarter. This segment of Apple alone would put it on the Fortune 150 list.
The services category was no slouch either. Itunes, icloud, Apple care, and now Apple TV drive significant revenue as well. Although under Refinitiv consensus estimates, the services category 12.7 billion in revenue this quarter.