Apple reports a parade of sales records as earnings top $30 billion for the first time, stock gains

Apple shares gained more than 3% in after-hours trading following the release of the results.

Apple’s flagship iPhone business posted a revenue record for the quarter as well, with sales of $71.63 billion for the December quarter, up from $65.6 billion a year earlier. Analysts tracked by FactSet expected the company to generate $67.57 billion in iPhone revenue.

Despite impacts from the pandemic and a supply crunch, Apple capped off a milestone calendar year, recording $378.35 billion in revenue for the whole of 2021, up from $294.1 billion in 2020.

Chief Executive Tim Cook ticked off even more records from Apple in a conference call Thursday afternon.

“We are pleased to see that our active install base of devices is now at a new record with more than 1.8 billion devices,” Cook said. “We set all-time records for both developed and emerging markets and saw revenue growth across all of our product categories except for iPad, which we said would be supply-constrained.”

Apple executives again held off on offering a hard financial outlook, as they have since the start of the pandemic, but they did provide some color around what they expect for the first calendar quarter of 2022. Chief Executive Tim Cook told the Wall Street Journal in an interview Thursday that Apple’s revenue would grow from the March quarter a year ago and added some other details.

“We saw supply constraints across most of our products,” Cook told the Journal as the results were released. “We’re forecasting that we will be less [constrained] in March than we were in the December quarter.”

Cook declined to say when he believes the supply-chain issues should lessen for Apple.

“You need to know a lot of things to be able to make an accurate forecast there, like how are other people’s demands in addition to what kind of supply we can squeeze out,” he said.

In the call, Chief Financial Officer Luca Maestri was more specific, saying that executives “expect to achieve solid year-over-year revenue growth and set a March-quarter revenue record,” but also that they “expect our revenue growth rate to decelerate from the December quarter.”

Apple revenue grew by 11.2% in the holiday quarter; if sales grew at the same percentage year-over-year in the March quarter, they would hit $99.62 billion. Analysts had forecast a lesser gain from last year’s fiscal second quarter, projecting on average sales of $90.17 billion, according to FactSet.

The company generated $10.85 billion in Mac revenue in the holiday quarter, ahead of the $8.68 billion it recorded a year earlier and topping the FactSet consensus, which called for $9.88 billion. Maestri noted that the “majority” of those sales were for personal computers that used Apple’s own chips, which Apple introduced last year.

“We are one year into our transition to Apple silicon and already the vast majority of our Mac sales are from M1-powered devices, which helped drive a record number of upgraders during the December quarter,” Maestri said in the conference call. “Our momentum in this category is very impressive as the last six quarters have been the best six quarters ever for Mac.”

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The Mac segment has been a big pandemic winner as people stock up on devices to work and study from home, but the iPad business, another hot pandemic category, didn’t have as strong of a showing in the December quarter. Apple reported $7.25 billion in iPad revenue, lower than the $8.44 billion it posted a year earlier and the consensus analyst estimate of $8.19 billion.

Apple generated $14.7 billion in revenue from its wearables, home and accessories category, up from $12.97 billion a year before. Analysts were expecting $14.36 billion. The services segment brought in revenue of $19.52 billion, up from $15.76 billion a year before, while analysts were looking for $18.67 billion.

“We would characterize this quarter as a major statement on iPhone/Services demand and Cupertino’s ability to navigate a supply-chain shortage in almost Teflon-like fashion,” Wedbush analyst Daniel Ives said in a note after the results were released, while maintaining an outperform rating and $200 price target.

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Ahead of Apple’s earnings call, analysts seemed cautiously upbeat about how supply-chain conditions were progressing.

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“Sentiment has shifted a bit more positive as the supply chain appears to have improved at a faster pace,” Barcalys analyst Tim Long wrote ahead of the report.

Long added that he was “not sure what guidance we will get” for the March quarter but anticipated that Apple could indicate iPhone expectations above normal seasonal levels, due to supply-chain improvements and some “product push-out” during the holiday quarter.

Shares of Apple have risen 6.6% over the past three months as the Dow Jones Industrial Average DJIA, -0.02% has declined 3.6%.