Apple Smashes Wall Street's revenue expectations for Q3

Apple posted revenue of $59.7 billion for its fiscal third quarter, smashing Wall Street’s expectations and showing growth across every single product category.

The better-than-expected earnings come as the pandemic has created uncertainty for Apple’s business. In its fiscal second quarter three months ago, Apple reported revenue growth of just 1% — billions below its initial guidance for that quarter, which it rescinded before reporting its results.

Total revenue was $59.7 billion. Services hit $13.2 billion, wearables at $6.5 billion, Mac at $7.1 billion, iPad at 6.6 billion, and iPhone at $26.4 billion.

Apple’s business is very seasonal, and its revenue was the highest the company has ever reported in its third quarter, typically the slowest of the year for Apple.

Revenue was up nearly 11% year over year, and every major product line saw year-over-year growth. Services were up 14.85% from the year prior, nudging the company past its internal goal of $50 billion in annual services sales.

“Apple’s record June quarter was driven by double-digit growth in both Products and Services and growth in each of our geographic segments,” said Tim Cook, Apple’s CEO.
“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.”

Many of Apple’s products can be useful during at-home quarantines amid the ongoing pandemic. While iPhone sales only rose 1.66% year over year, other product categories saw huge growth. iPad sales were up over 31% and the company’s other products category, which includes AirPods and the Apple Watch, grew 16.74% from the same quarter in 2019.

Apple’s Board of Directors has declared a cash dividend of $0.82 per share of the Company’s common stock. The dividend is payable on August 13, 2020 to shareholders of record as of the close of business on August 10, 2020.

The Board of Directors has also approved a four-for-one stock split to make the stock more accessible to a broader base of investors.

Each Apple shareholder of record at the close of business on August 24, 2020 will receive three additional shares for every share held on the record date, and trading will begin on a split-adjusted basis on August 31, 2020.

“Our June quarter performance was strong evidence of Apple’s ability to innovate and execute during challenging times,” said Luca Maestri, Apple’s CFO.
“The record business results drove our active installed base of devices to an all-time high in all of our geographic segments and all major product categories. We grew EPS by 18 percent and generated operating cash flow of $16.3 billion during the quarter, a June quarter record for both metrics.”

The company declined to issue guidance for the second quarter in a row, but Apple CFO Luca Maestri said on a call with analysts that the company expects iPhone supply in the fall to be delayed for a few weeks.