Jan 28, 2020

Apple shares surge after it posts record holiday sales

Photo: Apple

Buoyed by strong iPhone sales and a growing services business, Apple reported record quarterly revenue and profits that were well ahead of estimates and its own forecasts. Apple also projected revenue for the current quarter ahead of many analysts' expectations, sending shares higher.

Why it matters: The October-to-December quarter includes the all-important holiday shopping season, and Apple's results show the resiliency of its business.

Apple posted per-share earnings of $4.99, on revenue of $91.8 billion, up 9% from a year earlier. The company had been expected to post per-share earnings of $4.54, on revenue of around $88.38 billion, according to consensus estimates.

Geographically, sales rose in every region except Japan. Greater China sales, which had dropped for several quarters, totaled $13.58 billion, up from $13.17 billion a year ago.

Meanwhile: Apple CEO Tim Cook told CNBC that the company has shut one store in China and restricted employee travel amid the coronavirus outbreak.

For the current quarter, which runs through March, Apple said it expects revenue between $63 billion and $67 billion. CFO Luca Maestri said the company gave a wider-than-usual range due to uncertainty related to the impact of the virus.

Apple shares rose after hours following the report. The stock was recently trading at $324.99, up $7.30, or 2.3%.

By the numbers:

  • iPhone sales: $55.957 billion, up 8% from a year ago
  • iPad sales: $5.97 billion
  • Mac sales: $7.16 billion
  • Services: $12.71 billion, up 17%
  • Wearables and accessories: $10.01 billion

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China looms large in Apple's earnings report amid coronavirus outbreak

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China figured prominently throughout Apple's earnings report on Tuesday, helping fuel the company's record holiday quarter, but also playing a role in the uncertainty hanging over the current quarter.

Why it matters: Apple is the latest company to flag that China's coronavirus outbreak could harm near-term business.

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Apple will miss quarterly earnings estimates due to coronavirus

Apple CEO Tim Cook

Apple issued a rare earnings warning on Monday, saying it would not meet quarterly revenue expectations due to the impact of the coronavirus, which will limit iPhone production and limit product demand in China.

Why it matters: Lots of companies rely on China for production, but unlike most U.S. tech companies, Apple also gets a significant chunk of its revenue from sales in China.

Alphabet lifts the hood on YouTube financials

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Why it matters: Everyone knew YouTube was a big business, but until now, we didn't know exactly how big.