Apple turned in better results for the first three months of 2020 than analysts expected amid the COVID-19 crisis — including posting a record $13.3 billion in services revenue, up 17% year over year.
In February, Apple warned investors that it expected to miss previous targets for the March quarter, citing the coronavirus outbreak in China as disrupting iPhone manufacturing and hurting sales in the country. Then in mid-March, the tech giant said it was shuttering all its retail stores worldwide with the exception of Greater China; they remain closed, although .
Apple did not provide financial guidance for the June 2020 quarter, “given the lack of visibility and certainty,” CFO Luca Maestri told analysts. The stock dipped more than 2% in after-hours trading.
That said, Apple CEO Tim Cook said on the earnings call that in the second half of April, “we’ve seen an uptick across really across the board.” Part of it is due to new products, like the $399 iPhone SE smartphone launched April 24, and part of stemmed from the government-stimulus programs in the month, Cook said. “A part of it is probably the consumer behavior of knowing this is going to go on for a little while longer and getting some devices and so forth lined up to work at home more,” he added.
Cook touted the strength of the services business, which includes App Store, Apple Music, AppleCare and Apple TV Plus. He said the company still expects services revenue for fiscal 2020 to be double that of fiscal 2016, when sales were $24.35 billion.
“Despite COVID-19’s unprecedented global impact, we’re proud to report that Apple grew for the quarter, driven by an all-time record in Services and a quarterly record for Wearables,” Cook said in announcing the results.
Prior to the COVID-19 outbreak hitting China, Cook said, Apple was expecting to turn quarterly sales at the high end of its previous guidance range (which was $63 billion-$67 billion).
For the quarter ended March 28, Apple’s second quarter of fiscal 2020, the company reported revenue of $58.31 billion, up 1% from the year-ago quarter, and net profit of $11.25 billion (or earnings per diluted share of $2.55, up 4%). That beat Wall Street’s already-lowered expectations pegged Apple revenue of $54.54 billion and earnings per share of $2.26 for the period.
Sales of iPhone in the period fell 6.7%, to $28.96 billion. Revenue in Greater China also fell 6.7%, to $9.46 billion, while in the Americas sales came in at $25.47 billion, flat versus the prior year.
Sales in Apple’s Mac and iPad business segments declined year-over-year 3% and 10%, respectively, while revenue in the Wearables, Home and Accessories segment rose 18%, to $6.28 billion — a quarterly record.
Cook, on the earnings call, talked about Apple’s response to COVID-19. He name-dropped Oprah Winfrey — who teamed with Apple as part of launching America’s Food Fund and hosted a free series on Apple TV Plus, “Oprah Talks COVID-19” — and Lady Gaga, who was joined by Cook on “The Tonight Show Starring Jimmy Fallon” to announce Apple’s donation of $10 million to the “One World: Together at Home” concert fundraiser.
In addition, Cook said the company’s free coronavirus screening app, released in late March, has been downloaded 2 million times and Apple’s corresponding website has had 3 million visits. Apple also has distributed tens of millions of face masks and custom-built face shields to health care workers professionals worldwide and donated to organizations including Global Citizen and America’s Food Fund.
(Pictured above: iPhone 11)