Apple Inc. (APPL)
Apple Inc. designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories, and sells a variety of related services. The products include iPhone, Mac, iPad, and Wearables, Home and Accessories. Wearables, Home and Accessories includes Air Pods, Apple TV, Apple Watch, Beats products, Home Pod, iPod touch and other Apple-branded and third-party accessories. Air Pods are the Company’s wireless headphones that interact with Siri. Apple Watch is the Company’s line of smart watches. Its services include Advertising, AppleCare, Cloud Services, Digital Content and Payment Services. Its customers are primarily in the consumer, small and mid-sized business, education, enterprise, and government markets. Employees: 147,000.
- Summary of Q3 performances:
- EPS: $1.30 vs. $1.01 estimated
- Revenue: $81.41 billion vs. $73.30 billion estimated, up 36% year-over-year
- iPhone revenue: $39.57 billion vs. $34.01 billion estimated, up 49.78% year-over-year
- Services revenue: $17.48 billion vs. $16.33 billion estimated, up 33% year-over-year
- Other Products revenue: $8.76 billion vs. $7.80 billion estimated, up 40% year-over-year
- Mac revenue:$8.24 billion vs. $8.07 billion estimated, up 16% year-over-year
- iPad revenue: $7.37 billion vs. $7.15 billion estimated, up 12% year-over-year
- Gross margin: 43.3% vs. 41.9% estimated
Q3 Revenue reached a record of $81.4 billion, an increase of nearly $22 billion or 36% from a year ago.
Net income of $21.7 billion, diluted earnings per share of $1.30, and operating cash flow of $21.1 billion. iPhone revenue set a Q3 record of $39.6 billion, growing 50% YoY and exceeding expectations.
It’s double-digit growth in each product category with an all-time record for Services and Q3 records for iPhone, Mac and wearables, home, and accessories.
Products revenue was a Q3 record of $63.9 billion, up 37% over a year ago. A new all-time record.
Services set an all-time revenue record of $17.5 billion, up 33% over a year ago with records in each geographic segment. Company gross margin was 43.3%, up 80 basis points from Q2, driven by cost savings and a higher mix of services. Products gross margin was 36%, down 10 basis points sequentially, as seasonal loss of leverage was almost entirely offset by cost savings.
Services gross margin was 69.8%, down 30 basis points sequentially, mainly due to a different mix.
New service offer with Apple One, including: Apple TV+, Apple Arcade, Apple News+, Apple Card, Apple Fitness+.
Next, paid subscriptions continue to show strong growth. They have more than 700 million paid subscriptions across the services on the platform, which is up more than 150 million from last year and nearly 4x the number of paid subscriptions 4 years ago.
Wearables, home, and accessories grew 36% YoY to $8.8 billion. They began shipping new Apple TV 4K and Air Tags. In addition, Apple Watch continues to extend its reach, with nearly 75% of the customers purchasing Apple Watch during the quarter being new to the product.
For Mac, despite supply constraints, it represents $8.2 billion, up 16% over last year. The last four quarters for Mac have been its best 4 quarters ever. This level of sales success has been driven by the appreciate new Macs powered by the M1 chip. iPad performance was also strong with revenue of $7.4 billion, up 12%.
Cash position. Q3 of $194 billion in cash plus marketable securities. They retired $3 billion of term debt and increased commercial paper by $3 billion, with total debt of $122 billion.
As a result, net cash was $72 billion at the end of the quarter. They returned $29 billion to shareholders during the June quarter. This included $3.8 billion in dividends and equivalents and $17.5 billion through open market repurchases of 136 million Apple shares. They proceed with an accelerated $5 billion share repurchase program in May, resulting in the initial delivery and retirement of 32 million shares.
Q4 Outlook:
They expect revenue growth to be lower than Q4 YoY growth of 36% for three reasons.
They expect for services, a growth rate to return to a more “typical level”. The growth rate during the June quarter benefited from a favorable comparison as certain services were significantly impacted by the COVID lockdowns a year ago. And they expect supply constraints during the September quarter to be greater than Q3, especially because of the new iPhone 13.
Expectations iPhone 13 more than 100 million units to be sold as iPhone 12 already reached 100m sales and Apple asked 100m to A15 suppliers.
They expect a gross margin between 41.5% and 42.5%. Opex to be between $11.3 billion and $11.5 billion. The tax rate is around 16%.
SHARE PRICE – In 2021, the stock up by 8,4%. The share price (30/09/2021) closed at $141.50 per share.
