Apple’s fiscal first quarter was fueled by strong iPhone revenue due to iPhone 11 and iPhone 11 Pro demand as well as the company’s accessories unit, which includes Apple Watch and AirPods.
Apple reported first-quarter earnings of $4.99 a share on revenue of $91.8 billion, up 9% a year ago. Wall Street was expecting Apple to report fiscal first-quarter revenue of $88.5 billion with earnings of $4.55 a share.
CEO Tim Cook said that it saw a strong demand for iPhone 11 and iPhone 11 Pro as well as for wearable devices such as AirPods and Apple Watch. The company’s active installed base of devices topped 1.5 billion.
The big question is whether the results are enough to justify Apple shares and their run in recent weeks.
Apple shares have been propelled by optimism about the company’s Apple Watch sales, stronger-than-expected iPhone 11 cycle, and the success of services, which drives recurring revenue. There is also optimism about the upcoming iPhone upgrade cycle powered by 5G upgrades.
As for the outlook, Apple said it will deliver the second quarter between $63 billion and $67 billion with a gross margin between 38% and 39%. Wall Street analysts were modeling second-quarter earnings of $2.82 a share on revenue of $62.45 billion.
Key figures from the quarter include:
- iPhone revenue was $55.96 billion, up from $51.98 billion a year ago.
- Wearables, home and accessories revenue was $10.01 billion, up from $7.31 billion. That figure was in line with expectations.
- Services revenue was $12.71 billion, up from $10.87 billion. That figure was slightly below expectations.
But Mac sales fell from a year ago as did iPad revenue. The long-term question is how Apple’s China supply chain will be impacted by the coronavirus outbreak.