Apple's $64.7B Q4 beats Street estimate, but China sales flag

Posted:
in AAPL Investors edited October 2020
Apple's revenue in the fourth and final quarter of the fiscal year 2020 reached $64.7 billion, the iPhone maker revealed on Thursday, with the quarter also resulting in Apple's highest annual revenue figure.




Announced by Apple ahead of a customary conference call with analysts, Apple earned $64.7 billion for the quarter ending September 2020, an increase of about 1% from the $64 billion earned last year. Earnings-per-share for the quarter reached $0.73, down from the $3.03 seen in pre-stock split Q4 2019.

The gross margin of $24.7 billion is up from the $24.3 billion seen in Q4 2019, while operating expenses hit $9.9 billion.

"Apple capped off a fiscal year defined by innovation in the face of adversity with a September quarter record, led by all-time records for Mac and Services," said Apple CEO Tim Cook. "Despite the ongoing impacts of COVID-19, Apple is in the midst of our most prolific product introduction period ever, and the early response to all our new products, led by our first 5G-enabled iPhone lineup, has been tremendously positive.

Apple's revenue announcement occurs at the end of what could be considered a challenging year for the world, with the COVID-19 pandemic affecting not only Apple's retail efforts, but also its supply chain. Despite the troubles affecting various sectors, Apple has continued to put in an impressive performance, continuing where it left off in the third quarter.

The iPhone earned $26.4 billion in revenue, down from the same quarter in 2019, where it brought in $33.36 billion. Aside from the pandemic, it is likely that Apple's decision to delay the launches of its iPhone 12 models made an impact on iPhone sales for the period, but the 5G-enabled devices are expected to buoy the holiday quarter's sales more than usual.

The Mac segment, which had one prominent launch in the quarter with August's 27-inch 5K iMac update, experienced surprising growth. For the quarter, Apple reports Mac revenue at a record $9 billion, up from $6.99 billion last year.

The Services arm continues to be a reliable earner for Apple, providing a quarterly record $14.6 billion in revenue, up from $12.51 billion one year prior.

While Apple has recently launched new iPad lines, such as the fourth-generation iPad Air, only the 10.2-inch iPad was released at the end of the period, and it is unlikely to have made much of a dent in the quarter. Apple reports iPad revenue was $6.8 billion in revenue for the period, up year-on-year from last year's $4.66 billion figure.

The Wearables, Home, and Accessories category is likely to have enjoyed a few short weeks of extra sales from the launch of the Apple Watch Series 6 and Apple Watch SE, which both shipped shortly after their mid-September launches. The category reports revenue of $7.9 billion, continuing its year-on-year uptick from last year's $6.52 billion.

China, an important region of growth for the tech giant, generated $7.9 billion in sales, down significantly from the $11.1 billion notched in the year-ago period.

The quarter also marks the end of Apple's fiscal year for 2020, allowing for full-year comparisons to be made. For the full year, Apple reported $274.5 billion in net sales, up from the $260 billion in the 2019 fiscal year. The gross margin of $105 billion is up from 2019's $98.4 billion.

The operating expenses for 2020 are $38.7 billion, up from 2019's $34.5 billion, with research and development costs rising to $18.8 billion from $16.2 billion.

A continuing tradition for 2020 is that Apple did not provide forecasts for this quarter during its previous results, a policy it has undertaken due to the uncertain nature of the pandemic. Wall Street estimates put Apple's revenue at around $64 billion for the quarter.
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Comments

  • Reply 1 of 31
    mubailimubaili Posts: 454member
    The greater China segment is a bit worrisome. Hope it is solely due to the late launch of iPhone 12.
  • Reply 2 of 31
    MacProMacPro Posts: 19,851member
    Great news about Mac Sales.  Hopefully, with Si Macs this will accelerate.
    edited October 2020
  • Reply 3 of 31
    melgrossmelgross Posts: 33,642member
    It would have been interesting to see what sales and profits would have been if iPhones weren’t late. If it were equal to last year, it would have added another $7 billion to the number. As sales seem to be hopping since they did come out, with Apple being surprised that the Pro is selling much better than expected, iPhone sales could have been even higher. So Apple could have hit $72.7 billion, or even higher. Everyone else was much higher. iPhone sales could have been too. But people stopped buying, as they always do before a new phone comes out, with no new phones to make that sales drop up, as usual.
    edited October 2020 MacProtmay
  • Reply 4 of 31
    MacProMacPro Posts: 19,851member
    I read the iPhone 12 wasn't even included due to launch delays yet many media outlets are claiming iPhone sales are down without that fact.
    edited October 2020 GeorgeBMacJFC_PAronnBeats
  • Reply 5 of 31
    Rayz2016Rayz2016 Posts: 6,957member
    MacPro said:
    I read the iPhone 12 wasn't even included due to launch delays yet many media outlets are claiming iPhone sales are down without that fact.
    Yup, always listen to the media outlets. 🙄
    Beats
  • Reply 6 of 31
    And of course with the leaks stating 5G, a new design, new colors were  coming, it’s only natural that except for those whose iPhones died, it would be logical to wait. 

    MacPro said:
    I read the iPhone 12 wasn't even included due to launch delays yet many media outlets are claiming iPhone sales are down without that fact.

  • Reply 7 of 31
    melgrossmelgross Posts: 33,642member
    MacPro said:
    I read the iPhone 12 wasn't even included due to launch delays yet many media outlets are claiming iPhone sales are down without that fact.
    What media outlets? All that I’ve seen were talking about the delays.

    the problem is that investors aren’t as sophisticated as they are told they are. They have some immediate reactions to events because they fear if they don’t react rapidly, they’ll be caught with their pants or skirt down.

    i listened to the conference call as I always do. Apple explained what this all means, and the analysts, as I could tell by their questions, also understood. I never worry about first reactions. Apple’s stock will do what it always does, long term—go up.

    as far as Apple itself is concerned, it will also do what it does long term—grow.
    cg27fastasleepSpamSandwich
  • Reply 8 of 31
    MacProMacPro Posts: 19,851member
    Rayz2016 said:
    MacPro said:
    I read the iPhone 12 wasn't even included due to launch delays yet many media outlets are claiming iPhone sales are down without that fact.
    Yup, always listen to the media outlets. ߙ䦬t;/div>
    Are you insinuating I do?  I've been around a while you know.  It just pisses me off how much Apple always gets dissed by so-called tech experts. Read the first post here.


    edited October 2020 muthuk_vanalingamronn
  • Reply 9 of 31
    MacProMacPro Posts: 19,851member

    melgross said:
    MacPro said:
    I read the iPhone 12 wasn't even included due to launch delays yet many media outlets are claiming iPhone sales are down without that fact.
    What media outlets? All that I’ve seen were talking about the delays.

    the problem is that investors aren’t as sophisticated as they are told they are. They have some immediate reactions to events because they fear if they don’t react rapidly, they’ll be caught with their pants or skirt down.

    i listened to the conference call as I always do. Apple explained what this all means, and the analysts, as I could tell by their questions, also understood. I never worry about first reactions. Apple’s stock will do what it always does, long term—go up.

    as far as Apple itself is concerned, it will also do what it does long term—grow.
    Believe me, I know, I have a couple of million $ worth and bought a 100K today.
    edited October 2020
  • Reply 10 of 31
    melgrossmelgross Posts: 33,642member
    MacPro said:

    melgross said:
    MacPro said:
    I read the iPhone 12 wasn't even included due to launch delays yet many media outlets are claiming iPhone sales are down without that fact.
    What media outlets? All that I’ve seen were talking about the delays.

    the problem is that investors aren’t as sophisticated as they are told they are. They have some immediate reactions to events because they fear if they don’t react rapidly, they’ll be caught with their pants or skirt down.

    i listened to the conference call as I always do. Apple explained what this all means, and the analysts, as I could tell by their questions, also understood. I never worry about first reactions. Apple’s stock will do what it always does, long term—go up.

    as far as Apple itself is concerned, it will also do what it does long term—grow.
    Believe me, I know, I have a couple of million $ worth and bought a 100K today.
    Yup. Since mid 2004 for my last major venture. I bought 8,000 shares then at a “huge” $16.93 per share. I haven’t sold any since. I keep telling people to just buy it and leave it. Some listen, and are happy, and some don’t, and make excuses.
    SpamSandwich
  • Reply 11 of 31
    Apple is going to have a very strong holiday.  I think the new mini speaker is going to be a hot item.
  • Reply 12 of 31
    GeorgeBMacGeorgeBMac Posts: 11,421member
    mubaili said:
    The greater China segment is a bit worrisome. Hope it is solely due to the late launch of iPhone 12.

    That iPhone sales drop in China should have been expected by all:   Not only was there popular push back to Trump's Anti-China policies (it kinda pissed them off) but Apple only had a 4G phone it was trying to sell in a 5G country.   That would be like Apple trying to sell a 3G phone here in the U.S.

    We will need to see what happens under a Biden administration and a modern, 5G iPhone.
    ronn
  • Reply 13 of 31
    avon b7avon b7 Posts: 8,028member
    mubaili said:
    The greater China segment is a bit worrisome. Hope it is solely due to the late launch of iPhone 12.

    That iPhone sales drop in China should have been expected by all:   Not only was there popular push back to Trump's Anti-China policies (it kinda pissed them off) but Apple only had a 4G phone it was trying to sell in a 5G country.   That would be like Apple trying to sell a 3G phone here in the U.S.

    We will need to see what happens under a Biden administration and a modern, 5G iPhone.
    That's it, in a nutshell. 

    Nothing unexpected in that sense (even with the low cost SE on board).

    With all iPhone 12 sales falling into the next quarter, those results won't really be indicative of iPhone health eirher. That will only be possible by looking at the year as a whole. 
    GeorgeBMacronn
  • Reply 14 of 31
    MacPro said:
    I read the iPhone 12 wasn't even included due to launch delays yet many media outlets are claiming iPhone sales are down without that fact.
    Technically, that’s a factual statement. iPhone sales could be down in the quarter as demand generally slows down before the launch and the launch didn’t happen in that quarter to compensate. Which means, the iPhone sales could really be down in the quarter they reported. 
  • Reply 15 of 31
    tmaytmay Posts: 6,455member
    avon b7 said:
    mubaili said:
    The greater China segment is a bit worrisome. Hope it is solely due to the late launch of iPhone 12.

    That iPhone sales drop in China should have been expected by all:   Not only was there popular push back to Trump's Anti-China policies (it kinda pissed them off) but Apple only had a 4G phone it was trying to sell in a 5G country.   That would be like Apple trying to sell a 3G phone here in the U.S.

    We will need to see what happens under a Biden administration and a modern, 5G iPhone.
    That's it, in a nutshell. 

    Nothing unexpected in that sense (even with the low cost SE on board).

    With all iPhone 12 sales falling into the next quarter, those results won't really be indicative of iPhone health eirher. That will only be possible by looking at the year as a whole. 
    Estimates on iPhone sales for FY2021 by analyst Neil Cybart;

    "Apple sounding very optimistic about iPhone sales prospects for FY2021. 

     "My estimate does have Apple reporting an all-time high for iPhone unit sales in FY2021".

    (Apple sold 231 million iPhones in FY2015)

    https://www.aboveavalon.com/notes/2020/10/26/a-billion-iphone-users

    https://twitter.com/neilcybart
    ronn
  • Reply 16 of 31
    JFC_PAJFC_PA Posts: 947member
    Waiting on the new iPhones. Yawn. 
  • Reply 17 of 31
    GeorgeBMacGeorgeBMac Posts: 11,421member
    JFC_PA said:
    Waiting on the new iPhones. Yawn. 

    Patience is a virtue!
    (But it still sucks!)
  • Reply 18 of 31
    avon b7avon b7 Posts: 8,028member
    tmay said:
    avon b7 said:
    mubaili said:
    The greater China segment is a bit worrisome. Hope it is solely due to the late launch of iPhone 12.

    That iPhone sales drop in China should have been expected by all:   Not only was there popular push back to Trump's Anti-China policies (it kinda pissed them off) but Apple only had a 4G phone it was trying to sell in a 5G country.   That would be like Apple trying to sell a 3G phone here in the U.S.

    We will need to see what happens under a Biden administration and a modern, 5G iPhone.
    That's it, in a nutshell. 

    Nothing unexpected in that sense (even with the low cost SE on board).

    With all iPhone 12 sales falling into the next quarter, those results won't really be indicative of iPhone health eirher. That will only be possible by looking at the year as a whole. 
    Estimates on iPhone sales for FY2021 by analyst Neil Cybart;

    "Apple sounding very optimistic about iPhone sales prospects for FY2021. 

     "My estimate does have Apple reporting an all-time high for iPhone unit sales in FY2021".

    (Apple sold 231 million iPhones in FY2015)

    https://www.aboveavalon.com/notes/2020/10/26/a-billion-iphone-users

    https://twitter.com/neilcybart
    You can try it but there is NO value in trying to estimate full year sales. 
  • Reply 19 of 31
    tmaytmay Posts: 6,455member
    avon b7 said:
    tmay said:
    avon b7 said:
    mubaili said:
    The greater China segment is a bit worrisome. Hope it is solely due to the late launch of iPhone 12.

    That iPhone sales drop in China should have been expected by all:   Not only was there popular push back to Trump's Anti-China policies (it kinda pissed them off) but Apple only had a 4G phone it was trying to sell in a 5G country.   That would be like Apple trying to sell a 3G phone here in the U.S.

    We will need to see what happens under a Biden administration and a modern, 5G iPhone.
    That's it, in a nutshell. 

    Nothing unexpected in that sense (even with the low cost SE on board).

    With all iPhone 12 sales falling into the next quarter, those results won't really be indicative of iPhone health eirher. That will only be possible by looking at the year as a whole. 
    Estimates on iPhone sales for FY2021 by analyst Neil Cybart;

    "Apple sounding very optimistic about iPhone sales prospects for FY2021. 

     "My estimate does have Apple reporting an all-time high for iPhone unit sales in FY2021".

    (Apple sold 231 million iPhones in FY2015)

    https://www.aboveavalon.com/notes/2020/10/26/a-billion-iphone-users

    https://twitter.com/neilcybart
    You can try it but there is NO value in trying to estimate full year sales. 
    Such analysis is very valuable to investors, and developers. The the user base keeps growing at 20 to 30 million new iPhone users each year, and still retains most of the current users who will be upgrading, and it looks like this year is going to be exceptional for upgrades.
  • Reply 20 of 31
    avon b7avon b7 Posts: 8,028member
    tmay said:
    avon b7 said:
    tmay said:
    avon b7 said:
    mubaili said:
    The greater China segment is a bit worrisome. Hope it is solely due to the late launch of iPhone 12.

    That iPhone sales drop in China should have been expected by all:   Not only was there popular push back to Trump's Anti-China policies (it kinda pissed them off) but Apple only had a 4G phone it was trying to sell in a 5G country.   That would be like Apple trying to sell a 3G phone here in the U.S.

    We will need to see what happens under a Biden administration and a modern, 5G iPhone.
    That's it, in a nutshell. 

    Nothing unexpected in that sense (even with the low cost SE on board).

    With all iPhone 12 sales falling into the next quarter, those results won't really be indicative of iPhone health eirher. That will only be possible by looking at the year as a whole. 
    Estimates on iPhone sales for FY2021 by analyst Neil Cybart;

    "Apple sounding very optimistic about iPhone sales prospects for FY2021. 

     "My estimate does have Apple reporting an all-time high for iPhone unit sales in FY2021".

    (Apple sold 231 million iPhones in FY2015)

    https://www.aboveavalon.com/notes/2020/10/26/a-billion-iphone-users

    https://twitter.com/neilcybart
    You can try it but there is NO value in trying to estimate full year sales. 
    Such analysis is very valuable to investors, and developers. The the user base keeps growing at 20 to 30 million new iPhone users each year, and still retains most of the current users who will be upgrading, and it looks like this year is going to be exceptional for upgrades.
    It useless to investors because it is not based any realistic information and comes during an exceptional period of massive uncertainty and not only factors external to Apple (COVID, geopolitics etc). Rewind 12 months and tell me who could have forecast with enough certainty (to make an investment on) that Apple would have five new models in 2020.

    If you are an investor, you should be basing your decisions on more than one year estimates. 
    Beatsronn
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