Apple’s Third Quarter Results

On Thursday, July 30, Apple announced its financial results of the fiscal 2020 third quarter, ending on June 27, 2020.

Apple posted quarterly revenue of $59.7 billion, an 11% increase from the same period a year ago, and quarterly earnings per diluted share of $2.58, up 18%. International sales accounted for about 60% of the third quarter’s revenue.

Here’s how Apple performed in the third quarter compared to analysts’ expectations.

• Revenue: $59.7 billion versus $52.3 billion expected

• Earnings per share: $2.58 versus $2.07 expected

• iPhone revenue: 26.42 billion

• Services revenue: $13.2 billion versus $13.1 billion expected

• Accessories: $6.5 billion versus $6.1 billion

“Our June quarter performance was strong evidence of Apple’s ability to innovate and execute during challenging times,” said Apple’s CFO Lucas Maestri. “The record business results drove our active installed base of devices to an all-time high in all of our geographic segments and all major product categories. We grew EPS by 18% and generated operating cash flow of $16.3 billion during the quarter, a June quarter record for both metrics.”

Apple’s third-quarter beat analysts’ expectations by far, thanks to the strong performance of its accessories and services arms. iPhone, Mac, and Wearables revenue was also up in the quarter, although the company saw negative impacts in these categories following stores closures due to the coronavirus pandemic. The iPad and Mac segments saw a boost from work-from-home trends, which caused Apple to say it experienced product shortages as it attempted to meet demand. Cook said it “certainly looks like” Apple is set to have a strong “back-to-school season”.

“Apple’s record June quarter was driven by double-digit growth in both Products and Services and growth in each of our geographic segments,” said CEO Tim Cook. “In uncertain times, this performance is a testament to the important role our products play in our customers’ lives and to Apple’s relentless innovation. This is a challenging moment for our communities, and, from Apple’s relentless innovation. This is a challenging moment for our communities, and from Apple’s new $100 million Racial Equity and Justice initiative to a new commitment to be carbon neutral by 2030, we’re living the principle that what we make and do should create opportunity and leave the world better than we found it.”

The company, however, declined to provide a financial forecast for the current quarter in the third quarter release. The chief financial officer, Luca Maestri dropped a hint that the next iPhone would be delayed by “a few weeks” compared to previous years when device sales were available toward the end of September.

Apple’s Board of Directors declared a cash dividend of $0.82 per share of the company’s common stock. The dividend becomes payable by August 13, 2020 to shareholders of record as of the close of business on August 10, 2020.

The board also approved a 4-for-1 stock split to make the stock “more accessible to a broader base of investors”. Every Apple shareholder of record at the close of business on August 24 will receive three additional shares for every share they hold on the record date and trading will begin on a split-adjusted basis by August 31.