Apple (AAPL) delivered impressive results on July 30 and the investor reaction said it all as shares vaulted above $400 for the first time and just kept going, exceeding many analyst revised price targets within hours on the final day of the month.
I’ll give detailed commentary on those analyst views — including the ones who always had it right, versus those who are just admitting they missed the persistence of this consumer-tech-ecosystem juggernaut.
First, let me share notes from my colleague Ben Rains last week…
Pandemic Highlights Apple’s Growing Portfolio
Apple’s quarterly results easily topped estimates, with sales up 11% and adjusted earnings up 18%. And iPhone revenue popped 2% to crush projections, despite the broader economic downturn and lockdowns that forced it to close many stores.
On top of that, Mac and iPad sales jumped 21% and 31%, respectively. The firm attributed some of this growth to the need for people to work remotely and connect during these uncertain times.
AAPL’s wearables unit, which includes its smartwatch and popular wireless headphones, jumped over 17%, while services climbed 15%. This growth helps showcase how vital expansion beyond the iPhone is for the company. Apple now has revenue streams coming from its massive App store, as well as its various subscription services such as Spotify (SPOT) competitor Apple Music, its streaming TV service, news offering, video gaming, and more.
In fact, Apple’s paid subscriptions grew by more than 35 million sequentially to reach over 550 million across its various services, up 130 million from the year-ago period. And executives said on its earnings call that they remain confident Apple will hit its increased target of 600 million paid subscriptions before the end of the 2020 calendar year. Apple also grew its revenue across all of its geographic segments.
The ability for a high-end consumer tech firm to lift its sales by 11% to a whopping $60 billion in the heart of a global pandemic and economic crisis might be all some investors need to know.
(end of Ben Rains August 7 article)
Ben summed it up beautifully right there. But many investors want to dive into the numbers of trending segments and hear what the analysts are projecting for future sales and profit growth.
Because while many newbie investors are excited about the 4:1 stock split, the real story is how the Apple ecosystem continued to diversity beyond the iPhone and clobbered sales estimate projections in almost every category…
Apple Q3 Wearables, Home, Accessories sales $6.45B vs. $5.53B last year
Apple Q3 iPad revenue $6.58B vs. $5.02B
Apple Q3 Mac revenue $7.08B vs. $5.82B last year
Apple Q3 iPhone revenue $26.42B vs. $25.99B last year
Apple Q3 Services sales $13.16B vs. $11.46B last year
Apple CEO Tim Cook said on the earnings release, “Apple’s record June quarter was driven by double-digit growth in both Products and Services and growth in each of our geographic segments. In uncertain times, this performance is a testament to the important role our products play in our customers’ lives and to Apple’s relentless innovation. This is a challenging moment for our communities, and, from Apple’s new $100 million Racial Equity and Justice Initiative to a new commitment to be carbon neutral by 2030, we’re living the principle that what we make and do should create opportunity and leave the world better than we found it.”