Apple 2021 Earnings Report Summary

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Apple delivers strong beats on overall revenue, earnings, and services revenue.

Apple’s fiscal year ends in September. Therefore, the quarter that ended in March was called Q2 2021 instead of Q1. Earnings per share were beating the consensus estimate of $0.98 by 41.5%. Revenues were $89.7 billion, better than the estimate of $77.5 billion by 15.8%. This revenue was a record for the fiscal quarter that ended in March and was up by 53.7% from the same period a year ago.

Apple’s Key Metric: Services Revenue

Services revenue of $16.9 billion beat the estimate of $15.7 billion by 7.6%. This figure represented a new record for the company in any quarter and was 26.6% higher than the same period one year ago.
This service revenue is considered so crucial for Apple for several reasons. The first reason is that services revenue is steady and predictable.

At the same time, product revenue is subject to the seasonal retail industry trends. The second reason is that Apple’s services segment has a higher gross profit margin than the company’s product sales. The previous quarter reported that the margin for Apple’s services segment was 70.2%, and the gross margin for the company`s products segment was 36.2%. Hence, every dollar of additional services revenue grows in profits more than a dollar of these products revenue.

The company registered $90 billion of share repurchases, which is higher than $75 billion in 2019 and also $50 billion in 2020. The company also announced $0.22 per share that is a 7% increase in its dividend.
Apple’s shares have provided a total return of 91.9% over the past year. That is above the S&P’s total return of 46.2%.

AAPL Earnings – Summary of Apple earnings

This quarter was considered as the second consecutive in which Apple published almost double-digit yearly growth rates in all the company’s product categories. CFO Luca Maestri indicated that he expects double-digit revenue growth in the third quarter of 2021, but warned that worldwide semiconductor shortages constrain Apple.

CEO Tim Cook commented that the company is experiencing a surge of first-time buyers of its Macs. Sales of Macs increased by 70% this year, and sales of iPads also increased by 79%. In the meantime, the paid subscriptions for Apple’s services reached 660 million, which is higher by 40 million from the first quarter of 2021.

Next Earnings Report

Apple will release its next earnings report on August 3, 2021.

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