Apple CEO Cook says iPhone installed base now over one billion

Apple says it expects revenue growth this quarter to accelerate from last, while declining to offer a specific forecast.
Written by Tiernan Ray, Senior Contributing Writer

Apple this afternoon reported fiscal Q1 revenue and profit beat analysts' expectations by a very wide margin, and said its sales growth should accelerate this quarter.

Despite the big beat, Apple stock slipped lower in late trading.

CEO Tim Cook remarked that the results "wouldn't have been possible without the tireless and innovative work of every Apple team member worldwide" and said the company was "gratified by the enthusiastic customer response to the unmatched line of cutting-edge products that we delivered across a historic holiday season."

Added Cook, "We are also focused on how we can help the communities we're a part of build back strongly and equitably, through efforts like our Racial Equity and Justice Initiative as well as our multi-year commitment to invest $350 billion throughout the United States."

Apple hosted a conference call to discuss the financial results with Wall Street analysts.

During the conference call following the report, Cook said the iPhone installed base is now over one billion globally.

Overall, "We reached a new high water mark for our installed base, we passed 1.65 billion devices worldwide during the December quarter," said Cook.

Cook said the company saw a "record number of device activations during the last week of the quarter," and also that it saw a new record of FaceTime calls during Christmas.

CFO Luca Maestri said in prepared remarks that the results were "fueled by double-digit growth in each product category, which drove all-time revenue records in each of our geographic segments and an all-time high for our installed base of active devices."

Added Maestri, "These results helped us generate record operating cash flow of $38.8 billion. We also returned over $30 billion to shareholders during the quarter as we maintain our target of reaching a net cash neutral position over time."

It was the first report by the company since the iPhone 12 series of devices were introduced on October 23rd, which went on sale November 6th. Other product highlights in the quarter included introduction of the new iPad Air; the M1 chip, and new Mac computers using it; and the AirPods Max headphones.

For the three months ended in December, revenue rose to $111.4 billion, yielding EPS of $1.68.

Analysts had been modeling $103.27 billion in revenue and $1.42 per share. 

Sales rose across all geographies for Apple, but notably, sales were up 57% in the Greater China region, at $21.313 billion, making up 19% of sales.

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Apple stopped reporting its iPhone unit sales last year, but Wall Street sill compiles its estimates every quarter. Analysts have been writing about record quarterly sales, with the average estimate at 76 million iPhones sold. 

iPhone revenue came in at $65.6 billion, topping expectations of about $60 billion.

Apple's revenue from services rose by 24%, year over year, to $15.76 billion, making up 14% of revenue. 

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Alongside actual products last quarter, rumors and news tidbits emerged suggested Apple is developing a car, working on foldable phone screens, and high-end VR goggles

During the conference call, Maestri said that given continued uncertainty about the pandemic, the company would once again not offer a specific revenue forecast for the current quarter. 

"But we will provide some directional insights," Said Maestri. "For total company revenue, we believe growth will accelerate on a year-over-year basis, and in aggregate."

That implies revenue growth will be higher than 27% this quarter. The average estimate on Wall Street this quarter is for 27% growth, to $74.05 billion.

Apple's conference call started at 2 pm, Pacific/5 pm, Eastern, this evening, and you can catch the replay of it on the company's investor relations Web site.

Apple shares fell almost 1% after-hours and are currently down fractionally at $141.73.

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