Apple’s results far exceeded targets for Wall Street, $ 90 billion buyout announced by Reuters

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Β© Reuters. FILE PHOTO: Apple Inc logo is displayed outside of the company’s 2016 Global Developer Conference in San Francisco

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By Stephen Nellis

(Reuters) – Apple Inc on Wednesday posted sales and profits well above Wall Street expectations and announced a $ 90 billion share buyback as customers continued to switch to 5G iPhones and acquire new ones Mac models with the processor chips designed by Apple.

Sales in China nearly doubled and results exceeded analysts’ targets across all categories, driven by $ 6.5 billion in more than expected iPhone sales and Mac sales about a third above estimates. Apple chief executive Tim Cook said the company anticipates an economic recovery.

“I think the United States will be very strong. Certainly any indication I see would be very positive for the US economy,” Cook told Reuters in an interview.

The results came amid a global semiconductor shortage that has hampered U.S. automakers but appears to have left Apple, a major chip buyer known for its supply chain expertise, unscathed.

β€œThere was no material issue with our results due to the procurement,” Cook told Reuters.

Apple thrived during the coronavirus pandemic as home consumers stocked up on electronics and signed up for paid apps and services for fitness and music, and sales increased even more when Apple released iPhone 5G models last fall.

For the fiscal second quarter ended March 27, Apple said sales and profits were $ 89.6 billion and $ 1.40 per share, compared to estimates of $ 77.4 billion and 99 cents per share. , according to data from Refinitiv.

Apple (NASDAQ πŸ™‚ shares rose 3% in extended trading after the results.

IPhones have been the main driver of growth, suggesting consumers are switching to 5G, said Haris Anwar, senior analyst at Investing.com.

“Stimulus controls and successful vaccine deployments are certainly helping to boost consumer demand for tech gadgets at all levels. This environment will last at least a year, providing a solid platform for Apple to accelerate its growth.”

As Apple’s business booms, its App Store, one of its fastest growing companies, is under increased antitrust scrutiny due to in-app payment rules and Apple’s application review policies. In the coming weeks, Apple will defend a high-profile antitrust lawsuit brought by “Fortnite” maker Epic Games, while European Union antitrust regulators are expected to sue the company over a complaint from the service. Music streaming Spotify (NYSE :), Reuters reported. week.

Macs and iPads – two product categories Wall Street rarely relied on for growth – have both benefited from consumer work at home and distance learning. In addition to these trends, Cook said Apple customers respond strongly to the company’s M1 chip, its first internal processor for Mac computers.

“These two things happening at the same time have really boosted Mac sales. The last three quarters on Mac have been the strongest three quarters in Mac history,” Cook told Reuters.

Apple raised its dividend by 7% to 22 cents per share, a penny ahead of estimates, and announced the $ 90 billion share buyback. The owner of Google Alphabet (NASDAQ πŸ™‚ Inc announced a $ 50 billion buyout on Tuesday.

Apple said iPhone sales were $ 47.9 billion, up from $ 41.4 billion, according to FactSet data. Mac and iPad sales reached $ 9.1 billion and $ 7.8 billion, respectively, against FactSet’s estimates of $ 6.8 billion and $ 5.6 billion.

Apple investors are looking for growth in Apple’s accessories business, which includes products such as AirPods headphones and its new AirTag trackers, and its services business, which includes its App Store and new offerings such as paid podcasts. Sales in the segments were $ 7.8 billion and $ 16.9 billion, respectively, against estimates of $ 7.4 billion and $ 15.5 billion.

Cook said the company had 660 million paying subscribers on its platform, an increase from 620 million in the fiscal first quarter. Apple recently added new paid offerings such as its Fitness + workout service.

Apple’s sales in the Greater China Area in the fiscal second quarter, which included the busy Lunar New Year shopping season, rose 87.5% to $ 17.7 billion, from 57% in the previous quarter.

Apple shares have risen 93% in the past year, compared to a 61% increase for the of which Apple is a component. The lineup of products and services eased investor fears that Apple was relying too much on iPhone sales, turning Apple into a $ 2 trillion market-capitalization company two years after hitting the bar of the $ 1 trillion.

The rise has slowed this year despite Apple announcing its first quarter with more than $ 100 billion in sales in January, with Apple shares rising only 3.9% year-to-date against a rise of nearly 10% for the Nasdaq 100, as did investors. wonders if Apple stocks are too expensive compared to other tech stocks.

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