Apple posts record profit as Chinese sales soar - Financial Times

Apple reported its highest-ever net profit in the holiday quarter as revenues swelled way beyond forecasts to $111.4bn on the back of a 57 per cent rise in sales in Greater China.

Apple’s net profits rose 29 per cent to $28.8bn, against forecasts it would rise 6.3 per cent, while earnings per share jumped 35 per cent to $1.68. Forecasters expected revenues of about $102bn.

All five of the $2.4tn company’s product categories grew at double-digit percentages, led by a 41 per gain in iPad sales and a 30 per cent climb in wearables, which include AirPods and the Apple Watch. The iPhone, by far its biggest category, generated sales of $65.6bn, a 17 per cent gain that far outpaced analyst expectations of a 6 per cent rise.

iPhone sales accounted for 59 per cent of total revenues, an unexpectedly high figure after the company experienced supply constraints and a delayed launch for the 5G-enabled iPhone 12.

Revenues from “everything-but-the-iPhone” rose 28 per cent, a new record that underscores the success of the Mac, AirPods, and Apple Watches, as well as how relatively small fees for its services — such as the $9.99 monthly cost for Apple Music — add up when marketed to 1bn iPhone users.

“We couldn’t be happier with the December quarter and we couldn’t be more optimistic about the future,” Luca Maestri, Apple finance chief, told the Financial Times.

One disappointment for investors is that Apple declined to offer any guidance for the March quarter, citing uncertainties around the pandemic.

“It becomes very easy for things to get really difficult, really quickly,” Mr Maestri said, adding that many Apple stores remain closed in the Americas and Europe.

Nor did Apple release a new forecast for how its services division will grow in next few years, having attained its previous goal of doubling service revenues between 2016 and 2020 six months ahead of schedule.

In Greater China, revenues surged 57 per cent to $21.3bn. “There was probably some level of pent up demand for 5G iPhones in China and so we’ve seen phenomenal results there,” Mr Maestri said.

All other geographic segments set record highs, too, with revenues in the Americas up 12 per cent per cent to $46.3bn, European revenues up 17 per cent to $27.3bn, Japan revenue up 33 per cent to $8.3bn, and the rest of Asia up 11 per cent to $8.3bn.

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2021-01-27 21:35:00Z
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