Apple Q3 - Growth in All Segments

On Thursday night Apple released numbers that smashed expectations. Analysts were expecting a slight drop in revenues, instead Apple showed growth in all their divisions and saw their revenue climb 11%, translating into EPS rising 18%. Boom! Nice going from the worlds largest company.

This quarter is the companies slowest, but they still managed just shy of $60 billion in revenues. The good news for them is that all their non-iPhone divisions continue to grow at around 20% a year, meaning that Apple is less reliant on iPhone sales.

Looking ahead, there are high expectations for the new 5G capable iPhone 12. The Pro version is expected to have four cameras which will be flush with the back of the phone, unlike current models. Those are two huge upgrades and will see people lining up to stay relevant. Due to Covid interruptions, it looks like Apple might stagger the launch of their new products instead of having its usual September event.

The headline grabbing news was that they plan to do a 4 for 1 stock split on the 24th August. So for every 1 share you own, you will now own 4. The share price will go from roughly $400 to $100. Net-net, as a shareholder, your overall value will stay the same.

Not so long ago, the worry was that Apple was ex-growth. They have clearly shown that their strong brand can be leveraged going forward. The tailwind of Covid also helps them too. More people working and studying at home has seen iPads and Macs become must-have items.

Apple has a very strong brand and piles of cash, it is a company that will continue with its current momentum for some time to come.