Apple Spikes Past Sales, Profit Targets With Strong iPhone Demand, Warns Of Supply Restrictions By Reuters

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2/2 © Reuters. FILE PHOTO: Apple Inc logo displayed outside the company’s 2016 Worldwide Developers Conference in San Francisco 2/2

By Stephen Nellis (Reuters) – Apple Inc on Wednesday published sales and earnings well above Wall Street expectations and announced a $ 90 billion share buyback as customers continued to upgrade to 5G iPhones and acquire new models of Mac with Apple-designed processor chips. Sales to China nearly doubled and results beat analysts’ targets across all categories, led by $ 6.5 billion more in iPhone sales than anticipated and Mac sales roughly a third higher than estimates. Apple Chief Executive Tim Cook said the company anticipates an economic recovery. “I think the United States will be very strong. Certainly all the signs that I see would be very positive for the American economy,” Cook told Reuters in an interview. Apple expects revenue for the quarter ending in June to grow in “strong double digits” year-over-year, CFO Luca Maestri said on a conference call. Maestri said the company expects a steeper-than-usual drop in revenue between its fiscal second and third quarters due to the unusual timing of its iPhone 12 launch and that “supply restrictions” would cut revenue by between $ 3 billion and $ 4 billion. The results came amid a global semiconductor shortage that has hampered US automakers but appears to have left Apple, a major chip buyer known for its supply chain expertise, unscathed. “There was no material problem with our results due to supply,” Cook told Reuters. Apple thrived through the coronavirus pandemic as consumers going home stocked up on electronic devices and signed up for paid apps and services for fitness and music, and sales soared even further when Apple launched iPhone 5G models on last fall. For the second fiscal quarter ending March 27, Apple said sales and earnings were $ 89.6 billion and $ 1.40 per share, compared to estimates of $ 77.4 billion and 99 cents per share, according to Refinitiv data. Shares of Apple (NASDAQ 🙂 were up 3% in extended trading after the results. IPhones were the biggest driver of growth, suggesting that consumers are upgrading to 5G, said Haris Anwar, a senior analyst at “Stimulus controls and successful vaccine launches are certainly helping drive consumer demand for technology devices across the board. This environment will last at least another year, providing a strong platform for Apple to accelerate its growth.” While Apple’s business is booming, its App Store, one of its fastest growing companies, has come under increased antitrust scrutiny due to in-app payment rules and Apple’s app review policies. . In the coming weeks, Apple will defend a high-profile antitrust lawsuit brought by “Fortnite” maker Epic Games, while European Union antitrust regulators are ready to reprimand the company following a complaint from music streaming service Spotify. (NYSE :), Reuters reported. week. Mac and iPad, two product categories that Wall Street rarely counted on to deliver growth, benefited from consumers working from home and learning remotely. In addition to those trends, Cook said Apple customers were responding strongly to the company’s M1 chip, its first internal processor for Mac computers. “Both of these things happening at the same time really supercharged Mac sales. The last three quarters in Macs have been the strongest three-quarters in Mac history, “Cook told Reuters. Apple raised its dividend 7% to 22 cents a share, a penny ahead of estimates, in addition to announcing a $ 90 billion share buyback. Alphabet (NASDAQ 🙂 Inc, which owns Google, announced a $ 50 billion buyback on Tuesday. Apple said iPhone sales were $ 47.9 billion compared to analyst estimates of $ 41.4 billion, according to FactSet data. Mac and iPad sales were $ 9.1 billion and $ 7.8 billion, respectively, compared to FactSet estimates of $ 6.8 billion and $ 5.6 billion. Apple investors are looking for growth in Apple’s accessories business, which includes products like AirPods headphones and its new AirTag trackers, and its services business, which includes its App Store and new offerings like paid podcasts. Sales in the segments were $ 7.8 billion and $ 16.9 billion, respectively, compared to estimates of $ 7.4 billion and $ 15.5 billion. Cook said the company has 660 million paying subscribers to its platform, up from 620 million in the first fiscal quarter. Apple recently added new paid offerings, like its Fitness + training service. Apple’s sales in the Greater China region during the fiscal second quarter, which included the busy Lunar New Year shopping season, increased 87.5% to $ 17.7 billion, compared with an increase of 57 % in the previous quarter. Shares of Apple were up 93% over the past year, compared to a 61% rise of which Apple is a component. The variety of products and services eased investor concerns over valuation that Apple was too reliant on iPhone sales, turning Apple into a $ 2 trillion market capitalization company two years after hitting the 1 mark. trillion dollars. The rise has cooled off this year despite Apple reporting its first quarter with more than $ 100 billion in sales in January, with Apple shares rising just 3.9% from the beginning of the year versus a rise of nearly a quarter of a billion. 10% for the Nasdaq 100, as investors have done. he questioned whether Apple shares are too expensive relative to other tech stocks.