Apple
The quarter marked the first time that Apple exceeded $100 billion in revenue in a single quarter with 21% growth with a big chunk of growth coming from the iPhone 12. Additionally, sales in every category increased by double-digits.
Inside the Numbers
In its fiscal Q1, Apple reported earnings per share of $1.68 which was well above expectations of $1.41. Revenue came in at $111.4 billion vs $103.3 billion consensus, a 21% increase from 2020's Q1. iPhone revenue increased 17% to $65.6 billion which was significantly above analysts' estimates of $59.8 billion. Gross margins slightly increased to 39.8% from 38%.
On the conference call, CEO Tim Cook said that results were strong despite negative effects from the pandemic which led to many locations being shuttered. He also said that there are now 1 billion iPhone users in the world with 1.7 billion Apple product users.
Apple didn't provide guidance for the full-year or next quarter due to uncertainties stemming from the pandemic. The pandemic has led to a decrease in in-store sales, but it's been somewhat offset by an increase in PC and tablet sales.
Two of Apple's fastest-growing units are wearables and services. Wearables grew by 29%, while services grew by 24%. Analysts are particularly bullish on these categories as they should continue to grow faster than other parts of the company and also represent efforts by the company to increase monetization of users through add-ons and subscription bundles.
Stock Price Outlook
Apple's shares had been in rally-mode over the past week, climbing more than 12% to reach new highs.However, shares slightly weakened over the past couple of days due to the selling in broader markets. Given Apple's strong results, it's puzzling why Apple isn't trading higher. One possibility is that it's due to the broader market sell-off with fears of funds being forced to liquidate due to the short squeezes in many individual stocks.
Another possibility is that the rally in Apple over the past week was in anticipation of an earnings beat, setting up a "sell the news" trade.
