Apple Quarterly Revenue Increases 29% But Misses Forecasts, Hits 745 Million Subscribers for Paid Services
Apple, the world’s most valuable tech company, reported record revenue for a September quarter — but its stock slid after sales fell short of expectations.
The company reported posted $83.4 billion in revenue, up 29% year over year, and net income of $20.6 billion (or quarterly earnings per diluted share of $1.24). Wall Street analysts on average had pegged Apple revenue to come in at $84.85 billion and EPS at $1.24.
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Shares of Apple were down 3.7% in after-hours trading.
At the end of the quarter, Apple had 745 million paid subscribers, up more than 160 million from a year ago, CFO Luca Maestri said on the earnings call. That let to record quarter revenue in Apple’s Services segment of $18.28 billion, up 26%. That was better than the company expected, CEO Tim Cook said. The company’s subscription services include Apple Music, Apple TV Plus, iCloud, Apple Arcade, Apple News Plus and Apple Fitness Plus.
The results for the most recent quarter, which ended Sept. 25, come after the company had warned that sales growth would slow down from the prior quarter due to supply-chain constraints for iPhone and iPad. Supply-chain issues, including chip shortages, cost the company $6 billion in the September quarter — and is expected to be even bigger in the year-end 2021 quarter, according to Maestri.
Even with the supply-chain disruption, Apple hit record quarterly sales of iPhone, its biggest business segment, which grew up 47% year over year, to $38.87 billion.
In his prepared remarks, Cook emphasized the company’s latest products — as the tech giant has its fingers crossed for a healthy year-end holiday quarter. “This year we launched our most powerful products ever, from M1-powered Macs to an iPhone 13 lineup that is setting a new standard for performance and empowering our customers to create and connect in new ways,” Cook said.
Meanwhile, Apple hit new records for its 2021 fiscal year, with $365.8 billion in revenue (up 33%) and net income of $94.7 billion (up 65%). For fiscal year 2020, Apple reported sales of $274.5 billion and net profit of $57.4 billion.
During the September quarter, Apple returned more than $24 billion to shareholders, “as we continue to make progress toward our goal of reaching a net cash neutral position over time,” Maestri said in a statement.
Last month, Apple unveiled the iPhone 13, the next generation of smartphones with an option for up to 1 terabyte of on-board storage on the high end of the line and multiple enhanced camera features. The iPhone 13 models went on sale Sept. 24, just prior to the end of Apple’s fiscal Q4 2021.
On the call with analysts, Cook — as he’s done in recent quarters — highlighted the growing lineup of Apple TV Plus originals, and touted the company’s 11 Primetime Emmy wins, including seven for “Ted Lasso.”
“We couldn’t be more proud of our entire lineup of content” for Apple TV Plus, Cook said. The company has never disclosed how many subscribers have signed up for the premium streaming-video package.
