Notes of interest from Apple’s blockbuster holiday quarter earnings report

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Apple has published its crucial holiday quarter of 2021 results, breaking all of the company’s records for the quarter. Here are some notes of interest from the report, including remarks from Apple CEO Tim Cook and Chief Financial Officer Luca Maestri.

Apple’s first calendar quarter of 2022 earnings

Announced on Thursday ahead of Apple’s customary analysts call, Apple’s revenue of $123.9 for the quarter ending December 2021 equates to a year-on-year annual growth/decline from the then-record-setting $111.4B reported in the year-ago quarter. Apple’s earnings per share came in at $2.10 for the quarter, up from $1.68 in the Q1 2021 results.

The quarter’s results follows on from the excellent $83.4 billion in revenue seen in Q4 2020.

The Wall Street consensus for the quarter predicted that Apple would report revenue of $118.3 billion and an EPS of $1.89 for Q1 2022.

Launches from the previous quarter are also great contributors to Apple’s revenue, with Q1 being the first full quarter of availability for them. This includes the headline iPhone 13 generation, as well as the ninth-generation iPad and the sixth-generation iPad mini.

On the quarter, net sales for the iPhone jumped to $71.6 billion, up from $65.6 billion in the year-ago quarter. Mac sales jumped by over $2.2 billion to $10.8 billion, while iPad sales dropped by about $1.2 billion to $7.2 billion because of supply constraints.

Apple quarterly revenue and net profit

Apple first fiscal quarter of 2022 revenue and net profit

Apple’s wearables segment climbed to $14.7 billion from $13.0 billion in the year-ago quarter. Services jumped about $3.8 billion from 2020 to $19.5 billion in the holiday quarter of 2021.

“This quarter’s record results were made possible by our most innovative lineup of products and services ever,” said Tim Cook, Apple’s CEO. “We are gratified to see the response from customers around the world at a time when staying connected has never been more important.”

“The very strong customer response to our recent launch of new products and services drove double-digit growth in revenue and earnings, and helped set an all-time high for our installed base of active devices,” said Luca Maestri, Apple’s CFO. “These record operating results allowed us to return nearly $27 billion to our shareholders during the quarter, as we maintain our target of reaching a net cash neutral position over time.”

AppleInsider interpretations of the results and observations are notated by initials at the end of the statement. This is being updated live, refresh often for the most recent observations.

Highlights from the earnings report, and the following conference call

  • Apple stock started the day at $162.45, after a tumultuous week following the $3 trillion valuation landmark
  • Apple stock is down about 12.4% on the year.
  • Just after the earnings report, Apple stock jumped well over $160, and is at $162.20 as of 4:35 PM ET
  • The back-pedaling by analysts has already begun. We’ll be talking more about this next week when the dust settles — MW
  • At 5:00 PM ET, AAPL hit $167.21
  • Tim Cook: 1.8 billion devices in active use
  • Tim Cook: Supply constraints in the holiday quarter were worse than in the previous quarter
  • Tim Cook: App Store is an “economic miracle” with $260 billion paid out. 2021 was a new record for dev earnings
  • “We saw supply constraints across most of our products,” Cook said in an interview with the Wall Street Journal “We’re forecasting that we will be less [constrained] in March than we were in the December quarter.”
  • Luca Maestri: “Vast majority” of Mac sales are Apple Silicon (obviously – MW)
  • Half of iPad purchasers new to the product
  • Apple Watch saw about 2/3 of customers purchasing in the quarter new to the product
  • Paid subscriptions grew to more than 785 million in total, up 165 million in the last 12 months
  • $14.4 billion spent in the quarter on 93 million Apple shares, with 30 million shares retired
  • No revenue guidance being issued
  • Expecting March-quarter revenue record, growth rate to decelerate from the previous quarter, though
  • Challenging compare, channel-fill timing, and foreign exchange headwinds cited
  • Apple earned 10% more in the holiday quarter than it did in the entirety of 2011 — MO
  • Question and answer time!
  • Wamsi Mohan – Bank of America – Margins impressive, how sustainable mix trends are from services and iPhone Pro/Pro Max mix
  • Cook: “Strong demand across the iPhone 13 family” – no comment on particular mix (as always – MW)
  • Maestri: No real comment on product mix or services as it pertains to margins other than as we get bigger, we make more money (again, as always – MW)
  • Kyle McNealy – Jefferies – Are we expecting a recovery in iPad as component supply increases?
  • Cook: Repeats comment about March quarter being less constrained
  • Cook: Challenge on legacy nodes, limited by supplier (repeat from October earnings report – MW)
  • McNealy: wants more trajectory info
  • Cook again repeats legacy node limitations. Repeats that Apple does not guide by volume
  • Shannon Cross – Cross Research – Wants more color on Mac sales
  • Cook: Notes revenue increase in Macs, not limited to a narrow geographical area. Consumer response great for MacBook Pro
  • Cook: Six out of 10 sales in China new to Mac.
  • Cross: What were the things that outperformed in Services?
  • Maestri: Great on all fronts. All-time records for video, music, cloud, payments, App Store
  • Maestri: Spread all around the world

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