Apple Posts Record Revenue for Quarter
April 28 2021 - 5:00PM
Dow Jones News
By Tim Higgins
Apple Inc. reported record revenue Wednesday for the
January-to-March quarter because of surging sales of premium
iPhones and pandemic-induced buying of its other products.
Demand for new, higher-priced 5G iPhones helped fuel a more than
doubling of profit to $23.6 billion off $89.6 billion in revenue.
On a per share basis, the company said Wednesday, Apple earned
$1.40, beating analyst expectations of 99 cents.
Apple didn't provide any guidance in its release for this
quarter. Chief Executive Tim Cook is expected to speak publicly
with analysts this evening.
Investors are looking for signs that growth will continue, even
as the tech sector struggles with a microchip shortage and other
uncertainties stemming from the coronavirus pandemic. Some
shareholders are evidently jittery. Shares rose 1.3% this year
through Tuesday, while the S&P 500 was up about 12%.
"There's just so little room for error -- it makes it really
challenging, " said Dan Morgan, a senior portfolio manager who
focuses on technology at Synovus Trust Co., which counts Apple
among its largest holdings. "The market always looks six months
ahead."
Apple and other tech giants have benefited as students and
workers stuck at home turned to their products in record numbers,
pushing share prices to new heights. Apple's stock almost doubled
last year. Its current valuation, as a measure of its
price-to-earnings ratio, is the highest since December 2007,
according to FactSet, ratcheting up expectations for the company's
results.
Google-parent Alphabet Inc. beat sales records in the latest
quarter thanks to an increase in digital-ad spending, and Microsoft
Corp. saw its quarterly sales increase 19%.
Even as the world's biggest tech companies continue to post
record results, they remain in the crosshairs of regulators and
investigators who are scrutinizing how they wield market power.
Apple's strength in the market is being questioned by smaller tech
companies.
Apple this week rolled out software changes to iPhones and iPads
to make it harder for apps to track users across the internet, a
measure touted by Mr. Cook as a consumer safeguard. Facebook Inc.
and others have questioned Apple's motives in the matter.
Apple is on the eve of going to trial in federal court to defend
itself against claims by the maker of the popular videogame
"Fortnite" that the iPhone company is engaged in anticompetitive
behavior in its app store. Apple has denied wrongdoing. Observers
are also watching for regulators in the European Union to reveal
results soon of their investigations into claims of Apple's
monopoly behavior. Apple has said the complaints are baseless and
defended its role in promoting businesses on its App Store.
Apple stopped providing detailed guidance about coming quarters
last year, as Covid-19 upended daily life around the world and
initially sent markets falling amid fears of a global recession.
Still, analysts and investors will be looking for any signs of how
Mr. Cook is feeling about the months ahead.
Combined with the previous quarter's results, the Cupertino,
Calif.-based company is on pace, according to analysts' estimates,
to finish with an annual profit topping last year's record tally by
more than 20%.
Much of the growth last year was fueled in unexpected places.
Apple saw record demand for Mac computers and an 11% rise in iPad
tablet sales. That growth continued in the March period. On
Wednesday, Apple said Mac sales rose 70% to $9.1 billion and iPads
increased 79% to $7.8 billion. That beat analyst expectations for
increases of 27% and 29%, respectively.
The real engine of 2021 is the latest iPhone: Overall iPhone
revenue rose 65% to $47.9 billion. Analysts had expected a 42%
rise.
Higher-end versions of the iPhone 12 appear to be boosting that
figure. The average retail price in the U.S. during the past three
months rose $52 to $847 from a year earlier, according to data from
Consumer Intelligence Research Partners LLC, which surveys
buyers.
The most expensive version, the Pro Max with a 6.7 inch display
that starts at $1,099, saw its share grow to 20% of sales from 13%
a year earlier, the survey found.
The addition of faster 5G cellular connections to this year's
phone was expected to help Apple in China, where competitors had
beaten Mr. Cook to market with more advanced phones. Greater China
sales nearly doubled to $17.7 billion.
Write to Tim Higgins at Tim.Higgins@WSJ.com
(END) Dow Jones Newswires
April 28, 2021 16:45 ET (20:45 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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