Apple reported strong financial results for the third quarter on Tuesday, shattering Wall Street expectations. Each of Apple’s major product lines grew by over 12% annually.
Apple shares fell 1% in extended trading.
Overall, Apple’s revenue grew 36% from the June quarter of last year. IPhone sales grew nearly 50% annually.
Here are the key numbers when compared to Wall Street expectations, according to Refinitiv estimates:
- EPS: Estimated $ 1.30 vs. $ 1.01
- revenue: Estimated $ 81.41 billion versus $ 73.30 billion, 36% more than last year
- iPhone sales: Valued at $ 39.57 billion versus $ 34.01 billion, up 49.78% from last year
- Sales of services: $ 17.48 billion versus an estimated $ 16.33 billion, up 33% from last year
- Sales of other products: Estimated $ 8.76 billion versus $ 7.80 billion, 40% more than last year
- Mac sales: Estimated $ 8.24 billion versus $ 8.07 billion, 16% more than last year
- iPad sales: $ 7.37 billion versus $ 7.15 billion valued, 12% more than last year
- Gross margin: 43.3% vs. 41.9% estimated
Apple has not made any formal requirements for the sixth quarter in a row and since the beginning of the Covid-19 pandemic.
Apple also had a strong quarter in its Greater China region, which includes Taiwan and Hong Kong in addition to the mainland. Apple reported $ 14.76 billion in revenue in the region, up 58% from the year-ago quarter, though that was an easy comparison given that China was in a lockdown period during the quarter.
Sales in America grew nearly 33% year over year to $ 39.57 billion.
Apple’s quarter, which ends in June, is typically one of the slowest of the year, but the company has benefited from the home-working and distance-learning trends that have boosted sales of its premium computers.
Last year’s June quarter was a record for the company’s revenue despite global lockdowns, making Apple growing even compared to a strong base a year ago.
Cook mentioned that the success was due not only to people upgrading their old iPhones, but Android customers buying their first iPhone as well.
“We saw very strong double-digit increases in both upgraders and switchers during the quarter,” said Cook.
Apple’s quarter could have been even better if it weren’t for supply bottlenecks, likely related to global chip shortages, which primarily affected Mac and iPad sales.
“The shortage primarily affected Mac and iPad,” Apple CEO Tim Cook told Josh Lipton to CNBC. “We had predicted that the bottlenecks would run to $ 3 billion to $ 4 billion. But we actually managed to mitigate some of that and we are at the lower end of that range.”
Apple’s services business also shook off investor fears that its growth rate could slow as more people return to work and spend less on online services and apps. Services grew 33% year over year, an acceleration from the 26.7% growth rate last quarter.
While Apple’s services business spans many products and Apple doesn’t break down how it’s put together, Cook told CNBC that the company has broken records in music, video, cloud services, advertising and payments.
“It is clear that our long-term investment in our service strategy is successful,” Cook told CNBC.
Apple now has 700 million paying subscribers, 150 million more than last year, Cook said. Apple’s subscriber count includes customers who have subscribed to an app through billing in the Apple App Store.
Cook also said that due to the Covid-19 situation, Apple has postponed its return to its campus headquarters from September to at least October.
“I am very pleased with what we have been able to achieve in this fully remote-controlled mode,” said Cook.
Apple has announced a dividend of $ 0.22 per share. In a statement, Apple said it spent $ 29 billion on shareholder return during the quarter. Apple CFO Luca Maestri told CNBC that the company has repurchased nearly $ 450 billion worth of shares in recent years.