Apple CEO Tim Cook.
- Apple jumped 3% on Friday after it reported first-quarter earnings that beat analyst estimates.
- The iPhone maker revealed a record $124 billion in quarterly revenue and guided for more growth ahead.
- Here’s how three Wall Street analysts reacted to Apple’s fourth-quarter earnings report.
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Apple stock rose as much as 5% on Friday after its first-quarter earnings report revealed record quarterly revenue of $124 billion.
The iPhone maker said its supply chain issues are improving and that it expected growth to continue in 2022 as the company’s active install base surges to nearly 2 billion devices.
Here were the key numbers:
Revenue: $123.9 billion, versus analyst estimates of $118.5 billion
Earnings per share: $2.10, versus analyst estimates of $1.89
iPhone revenue: $71.6 billion, versus analyst estimates of $67.5 billion
Gross margin: 43.8%, versus analyst estimates of 41.7%
The only product segment that missed analyst estimates was the iPad, which was up against strong year-over-year comparisons after the product experienced a surge in popularity amid the COVID-19 pandemic. Apple said the iPad segment was most impacted by supply chain constraints.
And while Apple didn’t provide official guidance, Tim Cook told CNBC, “what we expect for the March quarter is solid year-over-year revenue growth. And we expect supply constraints in the March quarter to be less than they were in the December quarter,” Cook said.
Here’s how three Wall Street analysts reacted to Apple’s first-quarter earnings report.
Wedbush: “Back against the wall, Cupertino comes out with a Rocky Balboa-like performance.”
Wedbush reiterated its $200 price target and “Outperform” rating.
“With ~$10 billion already pushed due to the supply chain in the quarter, we would characterize this quarter as a ‘stunner’ on iPhone/Services demand and Cupertino’s ability to navigate a supply chain shortage in almost Teflon-like fashion. In a nutshell, Apple is flexing its muscles on the chip front while seeing impressive demand with the all-important China region a clear standout in the quarter geographically speaking,” Ives said, adding that he believes the pent-up demand story for Apple’s products is being underestimated by investors.
JPMorgan: “Strong demand and improving supply drive revenue and EPS upside.”
JPMorgan reiterated its $210 price target, “Overweight” rating, and “Top Pick” status.
“Importantly, the double-digit revenue growth and ‘solid y/y growth’ in F1Q and F2Q, respectively, now make it increasingly unlikely that revenues for the full year will be challenged in relation to y/y growth, running contrary to the bear thesis from investors on the shares, particularly as investors remain concerned about the pull forward of demand into FY21 impacted by the pandemic,” JPMorgan said.
Goldman Sachs: “Strong quarter and guide as Apple customers show no signs of faltering.”
Goldman Sachs increased its price target to $161 from $142 and reiterated its “Neutral” rating.
“All in all this was a very strong quarter and solid guide for Apple in what continues to be a tough operating environment. We continue to believe that ongoing work from home is benefiting Apple as FY21 revenue grew by 33% which is the highest revenue growth the company has seen since 2012 when the iPhone was in it ascendancy. Having said this these are strong numbers to end a tough broader market week which should reassure investors that late 2021 consumer electronics demand remained robust,” Goldman Sachs said.