May 1, 2020

Apple’s Q2 2020 Earnings: Significant Sales Growth from Services and Wearables, But No Guidance For Q3 Due to COVID-19 Pandemic


Apple reported its financial results for the second quarter of its 2020 fiscal year at 1:30 PDT today. The report will overlook how the company’s sales and quarterly revenue changed during the coronavirus outbreak, from mid-February to March 28th. The quarterly revenue is posted at $58.3 billion dollars, with a 1% increase in comparison with yesteryear’s second quarterly revenue. Earnings from the quarter per diluted share are at $2.55, which is about 4% from last year. Sales internationally accounted for 62% of the quarterly revenue.

Apple CEO Tim Cook reflects the second quarterly sales, including the logistic growth of revenue from the last quarter. He states the sales of wearables and Apple services, which include the Apple Watch and AirPods sales and the use of their services such as the App Store, Apple Music, subscription services, and iMessage, are the factors that helped improve the quarterly revenue as more Apple users stay at home.
“Despite COVID-19’s unprecedented global impact, we’re proud to report that Apple grew for the quarter, driven by an all-time record in Services and a quarterly record for Wearables,” said Tim Cook, Apple’s CEO. “In this difficult environment, our users are depending on Apple products in renewed ways to stay connected, informed, creative, and productive. We feel motivated and inspired to not only keep meeting these needs in innovative ways but to continue giving back to support the global response, from the tens of millions of face masks and custom-built face shields we’ve sent to medical professionals around the world, to the millions we’ve donated to organizations like Global Citizen and America’s Food Fund.”
The Cupertino company took its initiative to resolve the issues of PPE shortages by manufacturing over 7.5 million of their own face shields for hospitals and healthcare facilities worldwide. They donated to national and global charities and organizations such as Global Citizen and America’s Food Fund to allow more food banks and resources to underserved, displaced, and unemployed people. Apple has also let its Apple Card cardholders to pause monthly payments for their credit cards in March and April as the pandemic affected the economy worldwide.

Not only Apple has perceived growth in its quarterly revenue and helped out the health crisis with donations, but the company’s CFO, Luca Maestri, describes the financial performance of the company reported from the second quarter. Maestri interprets the total amount of cash Apple received every day during the second quarter and the company’s obligation to contribute proceeds to the US economy.
“We are proud of our Apple teams around the world and how resilient our business and financial performance has been during these challenging times,” said Luca Maestri, Apple’s CFO. “Our active installed base of devices reached an all-time high in all of our geographic segments and all major product categories. We also generated an operating cash flow of $13.3 billion during the quarter, up to $2.2 billion over a year ago. We are confident in our future and continue to make significant investments in all areas of our business to enrich our customers’ lives and support our long-term plans — including our five-year commitment to contribute $350 billion to the United States economy.”
In the end, Apple’s board of directors has declared the cash earnings of $0.82 per share of the company’s current stock revenue, which is an increase of 6%. Apple shareholders can receive the dividend payment on May 14th as the record of the close of business on May 11. The board has authorized an increase of $50 billion dollars to the existing share repurchase program. The next quarter will not have any guidance on the revenue as the coronavirus outbreak continues to heavily impact the economy globally.

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