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Photo: Apple

Apple reported quarterly sales and profits on Thursday that came in well above what most analysts had projected. The company issued a rare earnings warning in February, saying it would miss estimates due to both coronavirus-related iPhone production delays and weaker demand in China.

Why it matters: Apple is seen as a bellwether for the broader tech industry, and many other companies depend on revenue from supplying components for the iPhone.

By the numbers:

  • Revenue (January-March): $58.3 billion, up 1% from a year ago and above analysts' consensus of $54.54 billion, per Yahoo Finance
  • Net income (January-March) $11.25 billion vs. $11.56 billion a year ago
  • Per-share earnings (January-March): $2.55, vs. consensus estimate of $2.26
  • Services revenue (January-March): $13.35 billion vs. $11.45 billion a year ago
  • iPhone revenue (January-March): $28.96 billion, vs. $31.05 billion a year ago
  • iPad revenue (January-March): $4.37 billion vs. $4.87 billion a year ago
  • Mac revenue (January-March): $5.35 billion vs. $5.51 billion a year ago
  • Wearables and accessories revenue: $6.28 billion vs. $5.13 billion a year ago

On the company's earnings call, CFO Luca Maestri said that Apple won't be providing guidance for the current quarter, although it did increase its dividend and share buyback plans.

  • However, Maestri added that he expected the iPhone and wearables would do worse year-over-year in the current quarter than they did in the just-reported quarter, while the iPad and Mac businesses should do better, relatively speaking.
  • A strong dollar could also hurt revenue and profits.

What they're saying:

  • CEO Tim Cook said that the company was headed for a record quarter before the pandemic struck. Cook said that there were supply constraints in February, but that production had returned to typical levels by the end of March. "This may not have been the quarter it could have been absent this pandemic, but I don’t think I can recall a quarter when I have been prouder," he said.
  • Cook also said that the company will look for ways to add new health features to Apple Watch and other products. "You can bet that we’re looking at other areas," he said. "We were already doing that... I wouldn’t say the health door opened wider; it was already open fairly wide."

Go deeper

Aug 6, 2020 - Technology

T-Mobile says it's now No. 2 wireless carrier, ahead of AT&T

Illustration: Aïda Amer/Axios

T-Mobile Thursday said it has overtaken AT&T to become the number two wireless carrier in the U.S., ending the second quarter with 98.3 million total subscribers. Shares in T-Mobile surged 7% in after-hours trading.

The big picture: T-Mobile's merger with Sprint, which a federal judge allowed to go forward in February, gave the company a boost, and left the U.S. with only three major national wireless carriers. Verizon is in the lead.

Felix Salmon, author of Capital
Aug 6, 2020 - Economy & Business

The corporate victims of U.S.-China tensions

Illustration: Aïda Amer/Axios

The travails of TikTok are the most visible example of how the rapidly deteriorating relationship between the U.S. and China can evaporate tens of billions of dollars of corporate value.

Why it matters: When corporations find themselves at the mercy of politicians flexing their geopolitical muscles, they generally end up ruing the encounter.

Video gaming growth soars thanks to pandemic

Illustration: Aïda Amer/Axios

Video game usage in the U.S. has skyrocketed during the pandemic, leading to record revenues and profits for gaming companies like Nintendo, Epic Games and Electronic Arts.

Why it matters: The pandemic has sped the rise of video gaming as a core consumer pastime, and the trend is unlikely to reverse even after life returns to normal. "What we're seeing is an acceleration of pre-existing trends," NPD Group gaming analyst Mat Piscatella told Axios. "It's like we jumped ahead two years."