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Apple’s Q1 Results Crush Estimates

Apple’s Q1 Results Crush Estimates

Posted On January 29, 2020 12:33 am
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After Apple (NASDAQ:AAPL) returned to bottom-line growth in the fourth quarter of fiscal 2019, its earnings growth accelerated significantly in the first quarter of fiscal 2020. The tech giant’s strong double-digit EPS growth during the period was fueled by a big quarter for the iPhone and more sharp growth in the company’s services segment and its wearables, home, and accessories business.

Here’s a look at the results.

Strong revenue and EPS growth

Metric Q1 Fiscal 2020 Q1 Fiscal 2019 Change
Revenue $91.8 billion $84.3 billion 9%
Earnings per share $4.99 $4.18 19%
Gross margin 38.4% 38% 40 basis points

DATA SOURCE: APPLE.

Apple’s total revenue in fiscal Q1 was a record $91.8 billion, up 9% year over year. This easily beat management’s guidance for revenue between $85.5 billion and $89.5 billion. It also handily exceeded analysts’ average forecast for $88.5 billion.

Higher-than-expected revenue growth during the period helped drive margin expansion. Apple’s gross margin for the period was 38.4%, up from 38% in the year-ago period.

Combining Apple’s strong revenue growth and margin expansion with the company’s decrease in share count thanks to its aggressive share repurchase program, it’s no surprise that earnings per share spiked 19% year over year during the period to a record $4.99. This crushed a consensus estimate for $4.55. And it was a significant acceleration from 4% EPS growth in the fourth quarter of fiscal 2019.

“We also returned nearly $25 billion to shareholders during the quarter, including $20 billion in share repurchases and $3.5 billion in dividends and equivalents, as we maintain our target of reaching a net cash neutral position over time,” said CFO Luca Maestri in the tech company‘s earnings release.

Segment results

Segment Q1 Fiscal 2020 Revenue Q1 Fiscal 2019 Revenue Change (Decline)
iPhone $56.0 billion $51.2 billion 7.6%
Mac $7.2 billion $7.4 billion (3.5%)
iPad $6.0 billion $6.7 billion (11.2%)
Wearables, home, and accessories $10.0 billion $7.3 billion 37%
Services $12.7 billion $10.9 billion 16.9%

DATA SOURCE: APPLE.

The iPhone was the star of the quarter. Apple’s smartphone segment brought in…

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