Apple reports a strong 50% gain in fiscal third quarter iPhone revenue

Apple released its fiscal third-quarter earnings this afternoon which includes the three months ending June 26th. During the quarter, the tech giant set a record for its fiscal third quarter by generating revenue of $81.4 billion, a 36% year-over-year increase. It was another strong quarter for the iPhone with $39.57 billion in revenue rung up compared to the $26.42 billion in handset sales announced a year ago.

This works out to nearly a 50% increase in handset gross for Apple during the quarter and topped analysts' estimates of $34.01 billion. Apple iPad sales came to $7.34 billion versus $6.58 billion a year ago. The 11.6% gain is a sharp drop from the 79% annual increase in tablet sales Apple announced during its fiscal second quarter. The Services unit had a strong 33% hike in revenue year-over-year to $17.49 billion compared to the $13.16 billion in Services revenue that Apple reported during the same quarter in 2020.

Apple's Wearables, Home and Accessories division, which includes the most popular watch in the world, had a good quarter with revenue up a strong 36% during the fiscal third quarter to $8.78 billion.

Apple CEO Tim Cook said in a statement, "We saw a very strong double digit increases in both upgraders and switchers during the quarter." The chip shortage affected Apple's iPad sales which the executive mentioned in his statement. "The shortage primarily affected Mac and iPad. We had predicted the shortages to total $3 to $4 billion. But we were actually able to mitigate some of that, and we came in at the lower than the low end part of that range."

Cook added that "This quarter, our teams built on a period of unmatched innovation by sharing powerful new products with our users, at a time when using technology to connect
people everywhere has never been more important. We’re continuing to press forward in our work to infuse everything we make with the values that define us — by inspiring a new generation of developers to learn to code, moving closer to our 2030 environment goal, and engaging in theurgent work of building a more equitable future."

Apple CFO Luca Maestri stated "Our record June quarter operating performance included new revenue records in each of our geographic segments, double-digit growth in each of our product categories, and a new all-time high for our installed base of active devices. We generated $21 billion of operating cash flow, returned nearly $29 billion to our shareholders during the quarter, and continued to make significant investments across our business to support our long term growth plans."

Sales in the Greater China region soared 58.2% to $14.76 billion from last year's $9.33 billion. Gross in the Americas totaled $35.87 billion which worked out to a 32.8% increase on an annual basis. The three other regions reported by Apple (Europe, Japan, and the Rest of Asia Pacific) also had year-over-year gains during the fiscal third quarter.

Overall, total revenue for the fiscal third quarter amounted to $81.43 billion vs. $59.69 for the same quarter last year. That is a 36.4% gain for the year and wipes out Wall Street predictions of $73.30 billion. Net earnings amounted to $21.74 billion compared to 11.25 billion registered during the fiscal third quarter in 2020, a 93.2% hike. Earnings per share on a diluted basis came to $1.30 doubling the 65 cents reported last year.

Apple's shares barely reacted compared to past post-earnings report movements. The stock closed at $146.77 for a loss of $2.22 (-1.49%) during regular trading on Tuesday with a further decline of $1.66 (-1.13%) in after-hours trading. The company continued its practice of not making any formal guidance for the current quarter because of the pandemic. But CFO Maestri said that the company expects to report double-digit year-over-year growth in revenue for the fiscal fourth quarter.