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Apple delivers blowout earnings but new iPhones face delays amid COVID-19

REUTERS: Apple on Thursday (Jul 30) delivered blowout quarterly results, reporting year-on-year revenue gains across every category and in every geography as consumers working and learning from home during the COVID-19 pandemic turned to its products and services.

The report topped Wall Street expectations, with even some long-overshadowed categories like iPads and Macs getting fresh boosts. Shares rose 5 per cent in extended trading after the results.

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On a conference call with investors, Chief Financial Officer Luca Maestri said Apple expects the iPhone to continue its strong performance into the next quarter but that new models will be delayed.

"Last year, we started selling new iPhones in late September. This year, we project supply to be available a few weeks later. We expect the rest of our products categories to have strong year-over-year performance," Maestri said.

The results, which included iPhone sales some US$4 billion above of analyst expectations, came on the same day that US gross domestic product collapsed at a 32.9 per cent annualized rate last quarter, the nation's worst economic performance since the Great Depression.

Other major tech companies Amazon.com Inc and Facebook Inc also posted results that topped Wall Street targets, sending their shares up.

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With 60 per cent of sales coming from international markets, the Cupertino, California-based company posted iPhone revenues of US$26.42 billion, US$4 billion above analyst expectations of US$22.37 billion, according to IBES data from Refinitiv.

In an interview with Reuters, CEO Tim Cook said that after disruptions in April, sales began to pick back up in May and June, helped by what he called a "strong" launch for the US$399 iPhone SE introduced in April.

"I think the economic stimulus that was in place – and I'm not just focused on the US, but more broadly – was a help," Cook told Reuters.

The results underscore that Apple offers devices and services that customers flocked to despite stores re-closing in some US markets. Apple posted rising sales for accessories such as AirPods and services such as the App Store.

The continued growth in services and accessories also showed the durability of the company's brand, which has prompted investors to view it as a comparative safe haven and pushed up share prices since March.

The company also saw strong sales in its greater China region, where aggressive pricing during a June holiday shopping season and lower-priced iPhone SE model released in April helped boost sales 2 per cent to US$9.33 billion from US$9.16 billion a year earlier.

Apple also announced a 4-for-1 stock split, saying it wanted to keep shares accessible to a broad range of investors. Shares soared past US$400 for the first time Thursday, though they had been proportionally higher before a 7-for-1 split in 2014.

Apple's fiscal third-quarter revenue and profits were US$59.69 billion and US$2.58 per share, compared with analyst expectations of US$52.25 billion and US$2.04 per share, according to IBES data from Refinitiv.

Sales in its services segment, which also includes offerings such as iCloud and Apple Music, rose 14.8per cent to US$13.16 billion, compared with US$11.46 billion a year ago and analyst expectations of US$13.18 billion. Cook told Reuters that Apple has 550 million paying subscribers on its platform, up from 515 in the previous quarter.

Sales in the wearables segment that includes the Apple Watch rose 16.7 per cent to US$6.45 billioRead More – Source