Following the appearance of the Chief Executive Officer, Mr. Tim Cook, in front of the House yesterday, Cupertino tech giant Apple Inc (NASDAQ: AAPL) reported its financial profit for the third quarter of fiscal year 2020. The company reported $ 59.6 billion in revenue and $ 2.55 in diluted earnings per share. At the end of the second quarter of the current fiscal year, Apple has not issued any forward-looking financial statements guidelines, as it broke the tradition during one of the worst crises the company has faced in its history after its founder and former CEO, the Mr. Steve Jobs’ remarkable turnaround in the late 1990s.
Before Q3 FY2020, Wall Street analysts surveyed by Yahoo Finance expected Apple to bring in $ 52 billion in revenue and $ 2.04 in earnings per share. Looking at the results, it’s clear that Apple BEATED these estimates by a mile. In a slight spur of optimism, analysts have revised their EPS guidelines for Apple up slightly in the past 30 days, with three out of nine revisions coming in over the past seven days.
|Q3 FY2020||Q2 FY2020||Q3 Financial year 2019||YoY||Sequential|
|Earnings per share, diluted:||2.58||2.55||2.18||18%||1%|
Apple sales of approximately $ 60 billion at the end of June are a 2% gain for the second quarter of fiscal 2020, and a profit of 11% compared to the third quarter of fiscal 2019. In the March quarter, Apple had earned approximately $ 58 billion in revenues and in the previous year’s quarter the company had net sales of $ 53 billion. Given the tremendous shocks to its glove-wide activities as a result of the ongoing pandemic, the company’s revenues, operating profit and net result fell sharply in the second quarter of fiscal year 2020.
The company’s $ 37 billion sales cost in the previous quarter shows that, as it faced a light ease of constraints in the East and economic uncertainty in the West, the cost of soaring sales with a hairpin margin in the third quarter also caused an equally comparable change in the production costs of its products. In the second quarter of fiscal 2020, Apple saw production costs remain about the same year over year, even as demand fell and the company was forced to adjust operations.
To dive more into costs, Apple’s operating expenses were $ 9.6 billion in the last quarter. This marks a small consecutive rise. Looking at the company’s operating profit, Apple made $ 13 billion after all costs were accounted for to show an annualized year-over-year profit of 13%.
Looking at net profit for the quarter, Apple made $ 11 billion in net income in the past three months. With bottom-line earnings of $ 11 billion and $ 10 billion in Apple’s Q2 FY2020 and Q3 FY2019 respectively, today’s figures represent flat consecutive change and 12% year-over-year earnings.
Shifting to a segmental analysis of the iPhone maker’s performance during the coronavirus quarter, Apple made $ 26 billion, $ 7 billion, $ 6.5 billion, $ 6.4 billion, and $ 13 billion, respectively, through the iPhone, Mac, iPad , Wearables and Services. These figures mark year-on-year changes of 2%, 22%, $ 31, 17%, and 15% for the five segments, respectively. Sales of the iPhone, Mac, iPad, wearables, and services have changed successively by -9%, 42%, 65%, 8%, and 1%, respectively.
At the end of the second quarter of fiscal 2020, Apple had $ 3 billion in inventory, down $ 1 billion from the previous quarter. This was attributed to the goods that Apple needed to ship to its customers during the time gap between production cessation and drop in store traffic. In the previous quarter, the company’s inventories grew by approximately $ 600 million, in preparation for the launch of a new smartphone and due to reduced consumer purchasing power.
Apple’s cash reserves declined by $ 9 billion in the first quarter and declined by 8 billion at the end of the second quarter, as it aimed to maintain its ship during the crisis. At the end of the third quarter of 2020, Apple’s cash reserves fell again by $ 7 billion as they reached $ 33 billion at the end of the quarter.
After today’s earnings, the shares of Apple Inc (NASDAQ: AAPL) are up about 6% in aftermarket trading at 5:43 PM ET after closing at $ 384.76 today as investors respond to the results and announce a 4-to-1 stock split. Commenting on the company’s plans to use custom processors on the Mac, Mr. During the earnings call with analysts, Cook said that Apple plans to launch the first such product this year.