Apple hits new all-time high after iPhone demand shatters sales records

Tim Cook
Apple CEO Tim Cook. Reuters

  • Apple stock leaped as much as 2.8% in early trading on Wednesday, hitting a record high after the company topped estimates for its fiscal first quarter.
  • The tech giant bested expectations for quarterly revenue and earnings, fueled by robust iPhone sales and a rapidly expanding wearables business.
  • The company's fiscal second-quarter guidance also landed above estimates, though the company said the forecast revenue range was "wider than usual" to reflect uncertainty around the coronavirus outbreak.
  • Watch Apple trade live here.
  • Visit Business Insider's homepage for more stories.
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Apple jumped as much as 2.8% on Wednesday morning, notching a record high after beating analyst estimates for its fiscal first quarter.

The tech giant beat revenue and earnings estimates when it announced quarterly figures after the close on Tuesday. The holiday quarter saw revenue grow by 9%, to a record $91.8 billion, fueled by robust iPhone sales and Apple's younger wearables business.

Apple's fiscal second-quarter guidance also landed above Wall Street's expectations. Apple said the forecast range was "wider than usual" because of uncertainty surrounding the coronavirus outbreak, but the revenue range still landed above analysts' consensus estimate.

"We're still gathering lots of data points and monitoring it very closely," CEO Tim Cook told analysts in a call, adding that the virus has affected some of the company's supply chain and retail operations in China.

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Here are the key numbers:

  • Revenue: $91.8 billion, versus the $88.4 billion estimate
  • Earnings per share: $4.99 per share, versus the $4.55-per-share estimate
  • iPhone revenue: $55.96 billion, versus the $51.5 billion estimate
  • Services revenue: $12.72 billion, versus the $12.98 billion estimate
  • Second-quarter revenue guidance: $63 billion to $67 billion, versus the $62.33 billion estimate

The Wednesday leap drove the company's stock to an 11% gain in the year to date. The iPhone maker secured an 86% surge through 2019, and JPMorgan analysts warned investors ahead of the Tuesday report to protect against earnings losses in case the figures didn't surpass Wall Street's lofty expectations.

The Cupertino, California, company announced that its active installed base passed 1.5 billion over the three-month period, up from 1.4 billion a year ago. The growth represented a slowdown from past years but still demonstrated a successful expansion of Apple's customer base through non-iPhone products.

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"During the holiday quarter our active installed base of devices grew in each of our geographic segments and has now reached over 1.5 billion," Cook said in the report. "We see this as a powerful testament to the satisfaction, engagement and loyalty of our customers — and a great driver of our growth across the board."

One blemish in the first-quarter report came from Apple's services business, which posted revenue below analyst estimates. The business is among those Apple is relying on to drive revenue as iPhone sales growth slows, and the company has poured cash into its TV Plus, Apple Card, and iCloud products in recent quarters.

Apple didn't provide any figures for its new streaming business, but "upbeat" commentary suggests the product could reach a 45% take rate in 2020 and drive more than $4 billion in revenue, Goldman Sachs analysts wrote in a note on Wednesday morning.

The latest financial results were a stark difference from the company's year-ago report. Apple's first-quarter earnings in 2019 marked the first lack of a quarterly revenue record since the iPhone's release in 2007. The company cut guidance for the first time in 15 years before the report's release, citing weak iPhone sales and economic woes in China.

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Apple traded at $324.87 per share as of 10:35 a.m. ET on Wednesday.

The company has 27 "buy" ratings, 15 "hold" ratings, and six "sell" ratings, with a consensus price target of $328.26, according to Bloomberg data.

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