Apple 2021 Second Quarter Results brings a March quarter record revenue of $89.6bn

Apple announced financial results for its fiscal 2021 second quarter ended March 27, 2021, posting a March quarter record revenue of $89.6 billion, up 54 percent year over year, and quarterly earnings per diluted share of $1.40. International sales accounted for 67 percent of the quarter’s revenue. Fiscal second-quarter earnings easily topped expectations on top and bottom lines as well as across business units.

Revenues jumped nearly 54% to $89.6B, well ahead of consensus for $77.3B. Gross margin rose to $38.1B from a year-ago $22.4B; that marks a percentage of 42.5% vs. expectations for 39.9%. With operating expenses up only slightly ($10.6B vs. $9.5B, and slightly lower than consensus), operating income more than doubled, to $27.5B – as did net income, which rose to $23.6B from $11.25B.

IPhone’s in particular topped expectations for $40.8B in revenues by logging $47.9B in net sales, and Mac net sales hit $9.1B vs. expectations for $6.9B. Services beat more narrowly, $16.9B vs. $15.5B.

Operating cash flow was $24B; cash and cash equivalents stand at $38.5B. vs $38B as of Sept. 26, 2020

The company also declared a dividend hike of 7% (to $0.22/share) and an increase of $90B to an existing share repurchase program (two sources of return closely watched by shareholders).

Sales by geography: Americas $34.3B (up 35%); Europe $22.3B (up 56%); Greater China $17.7B (up 88%); Japan $7.7B (up 49%); Rest of Asia Pacific $7.5B (up 94%).

“This quarter reflects both the enduring ways our products have helped our users meet this moment in their own lives, as well as the optimism consumers seem to feel about better days ahead for all of us,” said Tim Cook, Apple’s CEO.
“Apple is in a period of sweeping innovation across our product line-up, and we’re keeping focus on how we can help our teams and the communities where we work emerge from this pandemic into a better world.
That certainly begins with products like the all-new iMac and iPad Pro, but it extends to efforts like the 8 gigawatts of new clean energy we’ll help bring onto the grid and our $430 billion investment in the United States over the next 5 years.”

The iPhone hadn’t sold quite as well as usual over the past few years as people held on to their current phones for longer. But the release of four iPhone 12 models last fall has unleashed purchases, and iPhone sales rose 66% to $47.9 billion on top of a holiday-season quarter when iPhone sales jumped 17%.

Apple’s other products and services are also growing. Mac sales soared 70% to $9.1 billion, a revenue record for the company, and iPad sales climbed 79% to $7.8 billion. CEO Tim Cook, on a call with investment analysts, noted the importance of the company’s computers and tablets during the pandemic as students and workers toiled virtually at home.

The company’s steadily expanding services division generated revenue of $16.9 billion during the quarter, up 27%. That division includes 15% to 30% commissions that Apple collects from most paid transactions completed with iPhone apps.

Apple CFO Luca Maestri said on the call that the company was not providing a revenue forecast given continued uncertainty in the world economy, but said that revenue in the current quarter would grow by “double digits” from the year before. Supply constraints resulting from a shortage of computer chips would lower revenue by $3 billion to $4 billion in the June quarter, primarily affecting the Mac and iPad, he said.

“We are proud of our March quarter performance, which included revenue records in each of our geographic segments and strong double-digit growth in each of our product categories, driving our installed base of active devices to an all-time high,” said Maestri.
“These results allowed us to generate operating cash flow of $24 billion and return nearly $23 billion to shareholders during the quarter.
We are confident in our future and continue to make significant investments to support our long-term plans and enrich our customers’ lives.”