On January 28, Apple revealed its financial performance for the first quarter of the 2020 fiscal year. Thanks to strong sales of its iPhone 11 series of handsets, the Big Tech firm significantly outpaced Wall Street’s forecasts. Besides, the company offered better than expected projections for its fiscal second-quarter results.
In a press release, Apple noted its FQ1 2020 sales represented a new quarterly record. Post earnings disclosure, the electronics manufacturer saw its stock price rise by two percent.
Apple FQ1 2020 Earnings
During the period ending December 28, Apple generated $98.1 billion in revenue, an increase of nine percent from FQ1 2019. Moreover, the firm recorded earnings per share of $4.99, or $22 billion. CNBC reports market analysts predicted the corporation would post sales of $88.50 billion against profits of $4.55.
Resurgent sales of its flagship handset drove the firm’s record earnings. In FQ1 2020, Apple made $56 billion in iPhone revenue, up eight percent from the same frame last year. Notably, a lack of consumer interest in the iPhone XR saw the corporation’s 2018 holiday sales decline by 15 percent. However, the iPhone 11 series, launched last November, has been considerably more popular.
Earlier this month, The Burn-In reported Apple’s mobile device sales had risen by 18.7 percent in the Chinese market.
That said, the corporation’s robust revenue didn’t just come from its iPhone segment. The firm touted that it brought in record wearables and service revenues last quarter. The company made $10 billion selling Air Pods and Apple Watches during the holiday season, an annual increase of 37 percent. Similarly, the firm’s App Store, Apple Music, iCloud, and Apple Card business generated $12.7 billion in revenue, up 17 percent year-over-year.
Notably, the company didn’t offer any hard numbers regarding the performance of its Apple TV+ streaming service. However, the firm’s CFO, Luca Maestri, said the platform had no “material impact” on its first-quarter services revenue.
Apple’s FQ2 2020 Guidance
The iPhone maker expects its strong sales performance to continue into this quarter. The firm offered guidance that it will bring in $63 billion to $67 billion in revenue in FQ2 2020. Moreover, the corporation noted its atypically broad projections are due to coronavirus related uncertainty. In FQ1 2020, the electronics giant derived 61 percent of its sales from international markets.
Wall Street estimates Apple will make $62.45 billion in the post-holiday period.
The Cupertino, California-based firm’s confidence can be attributed to its belief that its brisk iPhone sales will continue. Indeed, the company reportedly asked its suppliers to ramp up production on its mobile devices by 10 percent year-over-year. Bloomberg said the corporation increased handset manufacturing as a reaction to strong demand for the iPhone 11.
Furthermore, Apple reportedly plans to introduce a new budget smartphone in March. The firm recently tasked its manufacturing partners with fabricating a successor device to its iPhone SE. The handset will feature a 4.7-inch LCD screen, an A13 Bionic processor, and a single back-facing camera.
One of the key reasons the iPhone 11 outperformed its predecessor is Apple priced it $50 below the iPhone XR. As such, the corporation could expand its market share by appealing to cost-conscious buyers with an affordable handset.