Apple Inc. brushed off the COVID-19 crisis to report record results Thursday, and the company said it plans to split its stock in an attempt to make it “more accessible to a broader base of investors.”
Apple shares AAPL, +1.21% gained 5.8% in after-hours trading, pushing shares higher than $400, a level the stock has never eclipsed in regular trading.
The company beat expectations across the board with its fiscal third-quarter results, which marked a record for the June period. Smartphone sales benefited from the launch if the iPhone SE in April, the distribution of stimulus payments, and relaxation of shelter-in-place restrictions, driving improved performance in May and June relative to April.
Apple (AAPL) reported revenue for its fiscal third quarter ended June 30 of $59.7 billion, up 11% from a year ago, and well ahead of the Wall Street analyst consensus at $52.1 billion. Profits were $2.58 a share, soaring past the Street consensus at $2.09.
Product revenues were up 9.9%, while services were up 14.8%. The company showed sales increases in all major product areas, with iPhone up 1.6%, Macs up 21.6%, iPad up 31%, and wearables up 16.7%.
“Apple’s record June quarter was driven by double-digit growth in both Products and Services and growth in each of our geographic segments,” Apple CEO Tim Cook said 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.”
Chief Financial Officer Luca Maestri added that the quarter was “strong evidence of Apple’s ability to innovate and execute during challenging times.” He said the company’s active installed base of devices reached an all-time high in all geographic segments and all major product categories.
In a conference call with analysts and investors on Thursday afternoon, Cook said Apple saw better-than-expected demand for iPhones in both May and June. He added that Apple saw supply constraints in both iPads and Macs in the quarter amid strong demand. Wearables growth decelerated as expected. Cook said Apple doubled 2016 services revenue six months ahead of its original target of year-end 2020. He also said the recent virtual Worldwide Developers Conference attracted more than 22 million viewers.
The company said it now has over 550 million paid subscriptions across its services businesses and expects to reach 600 million before the end of the calendar year.
Apple didn’t give financial guidance in the press release announcing earnings. CFO Maestri confirmed on the call that the company isn’t providing revenue or margin guidance for the September quarter, but he gave some hints. In particular, he notes that last year the company made new iPhones available in late September, but that this year new phones will be “a few weeks later,” a veiled but noteworthy reference to the expected fall launch of the first 5G iPhones, which would now appear to be arriving in October.
Stock-Split of 4 to 1
Apple said its board declared a 4-for-1 stock split, effective Aug. 31. This would be the fifth stock split in the company’s history, the most recent being a 7-for-1 split in 2014. Previous splits occurred in 2005, 2000, and 1987. While stock splits should logically have no impact on stock prices, investors tend to like them, and they often fuel short-term share gains when announced.
In after-hours trading, Apple shares are up 4.6%, to $402.73. The stock has never closed a regular trading session above $400. With the rally, the stock is approaching a market cap of $1.75 trillion.
Apple will provide live streaming of its Q3 2020 financial results conference call beginning at 2:00 p.m. PT on July 30, 2020 at apple.com/investor/earnings-call/. This webcast will also be available for replay for approximately two weeks thereafter.
Apple periodically provides information for investors on its corporate website, apple.com, and its investor relations website, investor.apple.com. This includes press releases and other information about financial performance, reports filed or furnished with the SEC, information on corporate governance, and details related to its annual meeting of shareholders.
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