Apple delivers record results, sees growth in iPhones, services

Joanna Estrada
January 29, 2020

Apple said sales in the last three months of 2019 rose 8% year-on-year to $91.8bn (£70.5bn), while net profits increased 11% to reach $22.2bn. Meanwhile, after two consecutive quarters of growth, Apple saw iPad revenue decline by 11.2% year-over-year to $5.98 billion. CFO Luca Maestri said the company gave a wider-than-usual range due to uncertainty related to the impact of the virus.

"That said, the product itself is about storytelling and we think if we do that well there will be some number of those [shows] that will be critically acclaimed". "The situation is emerging and we're still gathering lots of data points and monitoring it very closely".

Apple last summer said that it was "eager" to bring online and in-store sales to customers in India.

The company has limited travel and reduced store hours in China, while its suppliers' factories remain closed longer than expected.

Currently, Apple sells its products in India through partnered third-party offline retailers and e-commerce platforms such as Amazon India, Flipkart and Paytm Mall.

"Apple also is forecasting a stronger Q2 than analysts predicted, but the fact that the coronavirus is spreading in unpredictable ways in China, where Apple has most of its hardware built, could upset this optimistic forecast", said eMarketer principal analyst Yoram Wurmser. He added that Apple's active installed base of devices now tops 1.5 billion. Greater China sales, which had dropped for several quarters, totaled $13.58 billion, up from $13,17 billion a year ago. In the year since, Apple slashed prices in China, one of its most important markets, to rekindle sales there. He added that the company is aiming for more than 600 million paid subscriptions by the end of the year.

"Services are important, but the trajectory is heading on target". Wearables revenues jumped 27 percent to $10 billion in the quarter, while Services grew 14.5 percent to $12.7 billion. He said that was reflected in the "aggressive" pricing of $4.99 a month and the bundle offer, where purchasers of any Apple device get a year free.

"Apple TV+ is off to a rousing start", Cook said during the call, before congratulating the stars of Apple TV+ originals who have been nominated for awards this season.

All in all, Apple's iPhone revenue came to $55.96 billion in the quarter, up from $51.98 billion a year ago. Back in September following the unveiling of the iPhone 11 family, we noted that Apple really listened to its fans and it has paid off with the 8% year-over-year gain in iPhone revenue.

Apple's shares have been on a tear of late, with optimism fueled by the strong iPhone 11 cycle, impressive Apple Watch sales and the success of its services business, which drives recurring revenue. The company had been expected to post per-share earnings of $4.54, on revenue of around $88.38 billion, according to consensus estimates. For the quarter ending in March, Apple forecast gross margins of between 38.0 per cent and 39.0 per cent, compared with analyst estimates of 38.2 per cent.

Other reports by Click Lancashire

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