Following is a summary of Apple's financial performance for their first quarter -- amazing! I tend to think of Apple as a computer company. As you look at the numbers, you will see that only 8% are Mac-related. I wish I'd bought a million $ of Apple stock about 10 years ago.
Jim Hamm
Apple released their holiday (1st) Quarter financials Wednesday night. With revenue hitting a staggering $111.4 billion and a $28.8 billion profit for the three months, Apple's financial performance broke through even the most optimistic projections. Apple experienced double-digit growth in each of their business sectors and throughout the world. I am old and have been in the Apple business for a long time. I distinctly remember an Apple Specialist conference many moons ago when John Branden, then the head of the sales channel but new to Apple, proudly got on stage and said "team, Apple may become a $5 billion company this year..." with such enthusiasm that I thought it was a lofty goal. Over 20 times that in a quarter is lofty! Apple told us this week that they now have over 1 billion iPhones and 1.6 billion devices in use around the world. WOW! Truly a remarkable achievement.
Yes, the release of the iPhone 12 drove this sales achievement, but to set this kind of record in the middle of the worst pandemic in a century is just phenomenal. Yes, the first quarter is Apple's strongest, accounting for about 30% of annual sales. iPhone growth of 17% year-over- year, with $65.6 billion in iPhone sales, was well beyond what anyone was expecting. With Apple retail stores closed in many areas of the world this quarter becomes even more remarkable considering the impact of the pandemic.
Services, which includes the App Store, etc was up 24% at $15.8 billion. To put that in some perspective, the Apple sector that sports over 65% margin and does not involve manufacturing, posted more revenue in one quarter than companies like General Mills and Netflix did in a year. On an annual basis that is more than Disney, Facebook and Caterpillar and could place just Apple's service sector in the Fortune 100.
Last year we saw the resurgence of the iPad after some decline in year-over-year sales.This quarter iPad saw growth in double digits with revenue of $8.4 billion versus just $6 billion in the same quarter last year. The Mac was not too shabby either, improving on last year's 0.2% growth to about 18% growth on $8.7 billion in sales. Wearables which include Apple Watch, AirPods, etc. increased revenue from $10 billion last holiday season to almost $13 billion this year.
"This quarter for Apple wouldn't have been possible without the tireless and innovative work of every Apple team member worldwide," said Apple's Tim Cook. "We're gratified by the enthusiastic customer response to the unmatched line of cutting-edge products that we delivered across a historic holiday season. We are also focused on how we can help the communities we're a part of build back strongly and equitably, through efforts like our Racial Equity and Justice Initiative as well as our multi-year commitment to invest $350 billion throughout the United States."
Apple's Board of Directors declared a $0.205 per share dividend payable to shareholders of record on February 8th. Of course, with a great quarter like this a bunch of folks followed the adage "buy on rumor, sell on news" and Apple stock went down initially, but I am pretty confident that the analysts that have raised their price targets on AAPL will be right in the long term.
Apple continued its pandemic-trend in not releasing any forecasts for the next quarter but CFO Luca Maestri said Apple expects revenue growth to accelerate year-over-year in the 2nd quarter.
Congratulations to the entire Apple team for a remarkable job!