APPLE’S EARNINGS TOP $110BN AMID PANDEMIC

Thu 28 January 2021:

Apple has revealed record sales of more than $110billion after demand for its new iPhone smashed expectations.

In an extraordinary set of results, the tech giant said sales in the final three months of 2020 had increased from $91.7billion to $111.4billion while profits rose from $22.2 billion to $28.7billion.

The holiday period is a crucial time for Apple, accounting for 30% of its sales, and 2020’s bumper quarter was boosted by strong sales of its latest iPhone.

The blowout results, stronger than Wall Street had expected, were fueled in large part by sales of the company’s latest iPhones. iPhone revenues were $65.6bn for the quarter, up 17% year-over-year.

Apple’s results came after fellow tech titans Facebook and Tesla had posted updates for the same period just minutes beforehand.

Social networking giant Facebook brought in revenues of $28billion after a shift towards e-commerce in the pandemic boosted demand for online advertising, while electric car maker Tesla said it made $10.8billion.

“We’re gratified by the enthusiastic customer response to the unmatched line of cutting-edge products that we delivered across a historic holiday season,” Apple chief executive Tim Cook said in a statement.

Cook said that the results could have been even better if not for the Covid-19 pandemic, which forced Apple to temporarily close some of its stores around the world.

“Taking the stores out of the equation, particularly for iPhones and wearables, there’s a drag on sales,” Cook told CNBC.

iPhone sales in particular jumped 17 per cent to $66billion, boosted by the release of the new model.

Sales of Mac computers were also up by 21 per cent, while iPads were up 30 per cent. Revenues from services rose 24 per cent to $15.7billion.

Just hours before the Apple results, rival Microsoft had also posted a huge jump in sales boosted by demand for its cloud computer services.

In sharp contrast to many traditional businesses, technology companies have benefitted from booming demand for gadgets and digital services during the pandemic as people spend more time relaxing and working indoors.

Facebook’s fourth quarter results yesterday mean its full-year sales rose from $69.57billion to $86.08billion, while profits leapt from $18.4billion to $29.11billion. Most of its sales come from advertising, which rose by 21 per cent to $84.06billion.

The company said the number of people using its social networks on at least a monthly basis had increased by 12 per cent to 2.8billion.

At Tesla, the final three months of 2020 brought its full year sales up from $24.6billion to $31.6billion.

The electric car maker reported a full year profit of $720million, up from $35.5million in 2019 – when it had still been loss-making for the first half.

But while Tesla succeeded in posting a profitable final quarter, it missed Wall Street’s expectations which sent its shares almost 5 per cent lower in after-hours trading.

Tesla stock has rallied by almost 700 per cent in the past year, giving it a valuation of more than $820billion and making it America’s fifth most valuable firm.