Three months ago, Apple missed its initial revenue target for the second quarter of 2020 due to the coronavirus pandemic but was still up slightly over the prior year’s quarter — a surprising feat enabled by a rapid and nearly complete shift to online sales, as well as growing demand for devices to accommodate working and studying from home. Today, the company announced its fiscal third-quarter results, top-lined by a record $59.7 billion in revenue, which was notably achieved despite avoiding advance earnings predictions for the quarter.
Analysts generally expected store closures and other COVID-19-related difficulties to negatively impact Apple’s revenues and earnings per share (EPS), with consensus estimates of roughly 3% year-over-year drops. This would have reflected a fall from 2019’s record $53.8 billion in revenues to $52.25 billion for the third fiscal quarter of 2020, with EPS dropping from $2.18 to $2.04. But in what has become a pattern, Apple beat the estimates handily.
Apple’s revenues were actually up roughly 11% over the year-ago quarter, and EPS jumped to $2.58, an increase of 18% that was due in part to share buybacks. Despite continued fears of a prolonged global recession impacted by COVID-19 closures, Apple still saw international sales contribute 60% to its revenue and growth across all of its geographic segments. Year over year, revenues grew from $25.056 billion to $27.018 billion in the Americas, $11.925 billion to $14.173 billion in Europe, and $9.157 billion to $9.329 billion in Greater China. They also went from $4.082 billion to $4.966 billion in Japan and from $3.589 billion to $4.199 billion in the Asia Pacific region.
The third fiscal quarter wasn’t huge for new Apple product releases, but the company did release the 2020 iPhone SE, the Magic Keyboard for iPad Pro, and a Magic Keyboard-updated version of the 13-inch MacBook Pro, following late second-quarter updates to the MacBook Air and iPad Pro, all of which contributed to the quarter’s revenue tallies. Software was the big focus of Apple’s annual WWDC developers conference in late June, pointing to major new hardware updates across several of its device families during the next two quarters.
iPhone sales were up to $26.418 billion from the year-ago quarter’s $25.986 billion, Mac sales were up to $7.079 billion from $5.82 billion, and iPad sales grew to $6.582 billion from $5.023 billion. Combined “wearables, home, and accessories” sales went up to $6.45 billion from $5.525 billion, and services climbed to $13.156 billion from $11.455 billion. Three of the categories also represented gains over the prior quarter, when Apple took in $5.351 billion from Macs, $4.368 billion from iPads, and $6.284 billion from wearables and accessories, though they dipped from fiscal Q2’s $28.962 billion from iPhones and $13.348 billion from services. Except for major milestones, the company no longer discloses unit sales for any of its product lines.
As Apple’s stock price is presently in the $385 per share range, the company announced today that it will split each share by 4:1 “to make the stock more accessible to a broader base of investors.” The split will be based on shares held as of August 24, 2020, and trading under the new price will take place on August 31. Apple is also offering a $0.82 cash dividend per share to shareholders as of the close of business on August 10, 2020.
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