Apple Stock Falls Despite a Blowout Quarter That Generated Over $100 Billion in Revenue

By Luigi Wewege Thursday, January 28, 2021

Apple stock has followed shares of other major tech companies in moving lower, despite an expectations-crushing performance delivered in the company’s first quarter. Shares of major tech companies fell during after-hours trading amid concerns related to stretched valuations and a potential correction.

Apple storefront.

Over $100 Billion in Revenues Generated

The tech business earned $1.68 per share to beat the $1.41 share price expected from analysts. For the first time in its history, the company saw its business revenue exceed the $100 billion mark ($111.44 billion vs. $103.28 billion expected) in a single quarter. The gross margin rose to nearly 40% to top the 38.0% that the market expected.

“Our December quarter business performance was fueled by double-digit growth in each product category, which drove all-time revenue records in each of our geographic segments and an all-time high for our installed base of active devices,” said Luca Maestri, Apple’s CFO.

“These results helped us generate record operating cash flow of $38.8 billion. We also returned over $30 billion to shareholders during the quarter as we maintain our target of reaching a net cash neutral position over time.”

Nearly all business units of the company witnessed higher-than-expected results. Apple generated $65.60 billion in revenues from iPhone sales, with the total install base for the company’s flagship product now exceeding 1 billion.

Revenue from services was reported at $15.76 billion, while analysts expected $14.80 billion. The tech business saw strong growth in iPad revenue that soared to $8.44 billion. Sales of Macs and other products generated $8.68 billion and $12.97 billion, respectively.

As expected, China led the recovery, with business sales soaring almost 57% to $21.3 billion there. Extremely strong results allowed the tech business to return over $30 billion to shareholders in total, including buybacks.

Impressed by Apple’s results, Morgan Stanley analyst Katy Huberty hiked the price target to $164.00 per share from the old $152.00 per share on the Overweight-rated Apple.

"Faster iPhone share gains, installed base growth, and services monetization were highlights of the better-than-expected F1Q. We expect Street estimates to move higher on a stronger rev guide and higher gross margin,” Huberty wrote in today’s note sent to clients.

The company also announced a dividend payout of $0.205 per share.

Summary

Apple stock price has moved modestly lower in after-hours trading Wednesday, despite an impressive set of financial figures presented by the tech company.

About the Author


Headshot for author Luigi Wewege

Luigi Wewege is the Senior Vice President, and Head of Private Banking at Caye International Bank. Outside of the bank, he serves as an Instructor at the FinTech School which provides online training courses on the latest technological and innovation developments within the financial services industry. Luigi is also the published author of: The Digital Banking Revolution.

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