Shares of Apple Inc. they fell more than 3% in expanded trade after executives ’cautious outlook overshadowed quarterly revenues that topped $ 100 billion for the first time.
Although the company did not provide any official forecast for the fourth consecutive quarter, executives said sales growth for AirPods and other laptops will slow in the current quarter. They also warned that service sales during the period will face tougher comparisons with the previous year.
“It was an extremely strong quarter. What is probably weighing on the actions at the moment is that they did not give any guidance, ”said Shannon Cross of Cross Research.
Sales rose 21% to $ 111.4 billion in the period ended Dec. 26, the company said Wednesday in statement. Analysts, on average, expected $ 103.1 billion, according to data compiled by Bloomberg. The profit was $ 1.68 per share, which also exceeded Wall Street estimates.
Expectations have been high for Apple on suggestions for a new “super cycle” of the iPhone, where millions of existing users upgrade older phones. The company has also recently introduced other new devices, including an upgraded Apple Watch, and has increased demand for iPads, Macs and consumer services that work and study from home during the pandemic. Shares had jumped more than 20% in the past three months, closing Wednesday at $ 142.06 in New York.
Revenue was driven by the iPhone 12, the first line of iPhones that included four new models and 5G capabilities. Phone sales were $ 65.6 billion, easily surpassing Wall Street estimates of $ 60.3 billion. The 5G capabilities attracted consumers, especially in China, and the updated camera features of the Pro models.
“This strength in iPhone sales provides evidence for Apple bulls that another iPhone super cycle may be on the cards,” said Dan Morgan, senior portfolio manager at Synovus Trust Company. The last supercycle came with the iPhone 6 in 2014 and the launches have since “felt rather like ripples opposite a wave, ”he added.
In a conference call with analysts, CEO Tim Cook and chief financial officer Luca Maestri trusted the iPhone business. They said the more expensive models of iPhone 12 Pro and iPhone 12 Pro Max with better cameras have sold especially well. Executives also highlighted strong sales in China, saying there was accumulated demand for iPhone with 5G capabilities.
Apple also said the number of active devices exceeded 1.6 billion in the first fiscal quarter, which includes more than 1 billion active iPhone users. Cook added that Apple recorded the largest number of upgrades ever made during this period and pointed out that the change from other smartphones was also strong.
Beyond the iPhone, Apple reported iPad sales of $ 8.45 billion, surpassing projections of $ 7.58 million. The company launched a redesigned iPad Air and a faster entry-level model during the quarter. Mac sales were $ 8.688 billion, missing estimates of $ 8.86 million. This comes despite Apple launching a new MacBook Pro, Mac mini and MacBook Air during the quarter.
“Supplies were probably restricted during the quarter. There are still significant delays in shipping some models, ”Cross said.
The influx of new hardware purchases also led to strong growth in the services segment, which includes the App Store, iTunes, Apple Music and iCloud. The company reported $ 15.8 billion in services during the quarter, exceeding estimates of $ 14.9 billion.
The company highlighted the strong growth in subscriptions to iCloud, Apple Music and the App Store, but did not provide details on the performance of TV +, its new video streaming service. The company has recently expanded its free TV + trials for several more months.
Apple released four major new products in the quarter in the Wearables, Home and Accessories segment: the Apple Watch Series 6, Apple Watch SE, the HomePod mini speaker, and the AirPods Max headphones. These devices gave Apple the strongest quarter to date for this segment with revenue of $ 12.977 billion. Analysts estimated $ 11.84 million.
Apple experienced significant growth in all major geographies, including Greater China, where sales rose to $ 21.3 billion, from $ 13.6 billion the previous year. The company reported revenue of $ 46.3 billion in the Americas region, an increase of about $ 5 billion over the previous year.
(Updates with the CEO, the CFO’s comments on the most expensive iPhones in the ninth paragraph.)