Apple Tops Analyst Estimates Once Again

Shares of Apple jumped 2.8% higher on Tuesday ahead of its key fiscal first quarter earnings release, which is historically the strongest quarter. The move was partially a rebound off prior session coronavirus inspired losses which saw the entire technology sector making strong gains on Tuesday. It was also a reflection of investor bullishness ahead of the earnings release from the Cupertino, California based tech giant.

Analysts were expecting earnings of $4.54 a share on revenues of $88.4 billion. That meant investors were pleased when the company reported revenue of $91.8 billion, and earnings of $4.99 a share. They responded by sending the stock 3% higher immediately following the earnings release in after-hours trade.

An 8% jump in iPhone revenues helped juice the quarter, as did the 17% increase in Apple’s services business. The services includes such things as Apple TV+, iCloud, and iCare warranties. Services are important because they have margins that are roughly double that of the hardware business.

For the upcoming second quarter Apple has guided its revenues will be between $63 billion and $67 billion versus analyst estimates of $62.45 billion.

The quarterly guidance is wider than usual for Apple, and CEO Tim Cook has said this is because of the ongoing coronavirus outbreak, which he described as “a very fluid situation.”

Mainland China is extremely important to Apple, with roughly 16% of the company’s sales coming from mainland China. Sales from Hong Kong and Taiwan add even more, which means any extended quarantine’s in those regions of the world will have a material impact on Apple’s sales.