Apple’s iPhone Revenue Misses Expectation! Share Price Drop Near 5% After Hours!

Apple Inc. announced financial results for its fiscal 2020 fourth quarter ended September 26, 2020 with a 7.4% drop in net income when compared to the same period last year. However, the company recorded an increase of 3.9% in net income for the 12 months ended in September.

 

The Company posted record September quarter revenue of $64.7 billion and quarterly earnings per diluted share of $0.73. International sales accounted for 59 percent of the quarter’s revenue.

However, iPhone revenues came in at $26.44 billion during the company’s fiscal fourth quarter, lower than the market estimation at $27.1 billion. The revenue also recorded a 20.7% drop year-over-year.

A decline in sales in China has a significant impact on Apple. Sales in greater China, which includes Hong Kong and Taiwan, dropped to $7.95 billion from $11.13 billion a year before, resulting in a decrease of more than 28%.

Nevertheless, Tim Cook, Apple’s CEO, was optimistic about iPhone 12 sales for a number of reasons, including 5G support, carrier promotions, and a loyal install base, to make up for missing revenue.

 

The share price of Apple Inc. (AAPL) dropped 4.87% after the trading down, pointing to a negative session on Friday.

 

“Apple capped off a fiscal year defined by innovation in the face of adversity with a September quarter record, led by all-time records for Mac and Services,” said Tim Cook, Apple’s CEO. “Despite the ongoing impacts of COVID-19, Apple is in the midst of our most prolific product introduction period ever, and the early response to all our new products, led by our first 5G-enabled iPhone lineup, has been tremendously positive. From remote learning to the home office, Apple products have been a window to the world for users as the pandemic continues, and our teams have met the needs of this moment with creativity, passion, and the kinds of big ideas that only Apple can deliver.”

“Our outstanding September quarter performance concludes a remarkable fiscal year, where we established new all-time records for revenue, earnings per share, and free cash flow, in spite of an extremely volatile and challenging macro environment,” said Luca Maestri, Apple’s CFO. “Our sales results and the unmatched loyalty of our customers drove our active installed base of devices to an all-time high in all of our major product categories. We also returned nearly $22 billion to shareholders during the quarter, as we maintain our target of reaching a net cash neutral position over time.”

 

Apple’s Board of Directors has declared a cash dividend of $0.205 per share of the Company’s common stock. The dividend is payable on November 12, 2020 to shareholders of record as of the close of business on November 9, 2020.