- This week, Apple Inc. (NASDAQ: AAPL) CEO Tim Cook announced that third-quarter revenue and profits were $59.69 billion and $2.58 per share
This week, Apple Inc. (NASDAQ: AAPL) CEO Tim Cook announced that third-quarter revenue and profits were $59.69 billion and $2.58 per share. Analysts were expecting between $52 billion and $53 billion in revenue.
Cook noted that the store closures caused by the COVID-19 pandemic negatively impacted the sales of the iPhone and wearable devices. But the iPad and Mac saw strong growth to the shelter-in-place orders and increase in remote learning.
The store closures also caused a negative impact on services like AppleCare repairs. However, App Store, Apple Music, video products, and cloud services saw a spike for the quarter.
The services segment — which includes iCloud and Apple Music — saw revenues of $13.16 billion. And the sales in the wearables segment increased by 16.7% to $6.45 billion.
Cook also said that the iPhone did better than what was expected. Sales for the iPhone increased by 1.7% to $26.4 billion in the fiscal third quarter — which is above the estimated $21-$22 billion analysts were expecting. Of that revenue, 60% came from international markets. The new $399 iPhone SE especially saw strong results since being introduced in April.
There were especially strong sales in the greater China region due to the aggressive pricing of the new iPhone. In a note to investors, Daniel Ives of Wedbush Securities said that 20% of iPhone upgrades are expected to happen in China over the coming year.
During the earnings call, Apple CFO Luca Maestri indicated that delays caused by the pandemic could prevent the company from updating the new line of iPhones in September. It will most likely happen a few weeks later.
The flagship iPhone line this year is expected to be called the iPhone 12. And the variations within the iPhone 12 are expected to be called the iPhone 12, iPhone 12 Pro, and iPhone 12 Pro Max.
Apple is reportedly working with TSMC for the 5-nanometer A14 processors, which will have Qualcomm’s Snapdragon X55 modems for supporting 5G connections.
Over 100 Apple retail stores had to be shut down in the U.S. again due to the pandemic. And due to the uncertainty of the economic crisis and pandemic, Apple declined to provide fiscal fourth-quarter guidance.
4-for-1 Stock Split
Apple’s board also approved a 4-for-1 stock split. This is to make the company’s shares more accessible to a wider range of investors. On Thursday, Apple’s share price hit $400 for the first time with the exception of the share price being proportionally higher before the company’s 7-for-1 stock split in 2014.
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.
“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 Cook in a statement. “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.”
Apple’s Board of Directors also 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.