Apple delivered its largest quarter by revenue of all time on Wednesday at $111.4 billion in its first-quarter earnings report for fiscal 2021. It’s the first time Apple crossed the symbolic $100 billion mark in a single quarter, and sales were up 21% year-over-year.
Apple stock rose slightly in extended trading.
Apple’s results for the quarter ending in December weren’t just driven by 5G iPhone sales. Sales for every product category rose by double-digit percentage points. Apple’s earnings per share and sales handily beat Wall Street expectations.
Here’s how Apple did versus consensus Refinitiv estimates:
- EPS: $1.68 vs. $1.41 estimated
- Revenue: $111.44 billion vs. $103.28 billion estimated, up 21% year-over-year
- iPhone revenue: $65.60 billion vs. $59.80 billion estimated, up 17% year-over-year
- Services revenue: $15.76 billion vs. $14.80 billion estimated, up 24% year-over-year
- Other Products revenue: $12.97 billion vs. $11.96 billion estimated, up 29% year-over-year
- Mac revenue: $8.68 billion vs. $8.69 billion estimated, up 21% year-over-year
- iPad revenue: $8.44 billion vs. $7.46 billion estimated, up 41% year-over-year
- Gross margin: 39.8% vs. 38.0% estimated
Apple CEO Tim Cook said that the results could’ve been even better if not for the Covid-19 pandemic and lockdowns that forced Apple to temporarily shutter some Apple stores around the world.
“Taking the stores out of the equation, particularly for iPhones and wearables, there’s a drag on sales,” Cook told CNBC’s Josh Lipton.
Cook said that Apple’s total install base for iPhones is over 1 billion, up from the previous data point of 900 million. The total active install base for all Apple products is 1.65 billion.
Apple did not provide official guidance for the upcoming quarter. It hasn’t offered investors forecasts since the beginning of the pandemic.
But even the lack of guidance could not diminish what was a blowout quarter for the iPhone maker. Apple has benefited during the pandemic from increased PC and gadget sales as people who are working or going to school from home because of lockdowns look to upgrade the devices they use.
Apple released new iPhone models in October. The four iPhone 12 models are the first to include 5G, which investors believed could drive a “supercycle” of users clamoring to upgrade. iPhone revenue was up 17% from the same period last year.
“They’re full of features that customers love, and they came in at exactly the right time, with where 5G networks were,” Cook said.
Apple’s other products category, which includes Apple Watch and headphones like AirPods and Beats, was up 29% from last year to $12.97 billion, even as people are spending less time commuting and traveling. Apple released a high-end set of headphones, AirPods Pro Max, in December, with a steep $549 suggested price.
Macs and iPads, the Apple devices most likely to be used for remote work and school, were also up this quarter. Apple released new Mac computers powered by its own chips instead of Intel processors in December to positive reviews that said they were superior in terms of power and battery life to the old models.
Apple’s services business, which the company has highlighted as a growth engine, was up 24% year-over-year to $15.76 billion. That product category is a catch-all: it includes the money Apple makes from the App Store, subscriptions to digital content like Apple Music or Apple TV+, licensing fees paid by Google to be the iPhone’s default search engine and warranties.
Apple highlighted in its release that international sales accounted for 64% of the company’s sales, up from 61% in the same quarter last year.
How new iPhone models fare in China, the company’s third largest market, is a constant topic of discussion among investors. Sales in what Apple calls “greater China,” which includes Taiwan and Hong Kong, were up nearly 60% to $21.31 billion.
“China was strong across the board,” Cook said.
Apple also declared a cash dividend of $0.205 cents per share and said that it had spent over $30 billion on total shareholder return, which includes share buybacks, during the quarter. Apple’s first fiscal quarter is typically is largest of the year and includes critical holiday sales during the month of December.
Wednesday’s blowout earnings are also a recovery story for Apple. Two years ago, Apple warned that its projection for its holiday quarter sales were lower than the company expected, a rare warning that raised questions whether Apple was losing its momentum. On Wednesday, Apple revealed that revenue is up over 32% since that report.