Apple's first quarter of 2020 was its best ever

Apple had its best quarterly performance in the first quarter of 2020.

The first quarter of 2020 was Apple's best ever with the highest revenue it has ever generated in a quarter. Compared to the same period last year, the revenue of Apple Inc rose 9% this year during the first quarter rising to $91.8 billion. Apple's quarterly earnings per diluted share also reached $4.99; another record for the company. Around 61% of the company's revenue for the first quarter came from international sales. 

According to Apple CEO Tim Cook, it was the highest quarterly revenue ever. Apart from strong demand for iPhone 11 and iPhone 11 pro, the main factors driving higher sales and revenue were all time records for services and wearables. Apple's active installed base of devices grew during the holiday quarter in each of its geographic segments and has reached 1.5 billion. Apple sees it as a proof of high customer satisfaction, customer engagement and loyalty of its customers which are driving higher growth across the board. 

According to Apple CFO Luca Maestri, Apple's very strong business performance drove an all-time net income record of $22.2 billion and generated operating cash flow of $30.5 billion. The company has returned around $25 billion to shareholders including $20 billion in share repurchases and $3.5 billion in dividends and equivalents, as Apple maintains its target of reaching a net cash neutral position over time. 

Apple has offered the following guidance for the second quarter of 2020:

  • Net revenue between $63.0 billion and $67.0 billion
  • gross margin between 38.0 percent and 39.0 percent
  • operating expenses of around $9.6 billion to $9.7 billion
  • other income/(expense) of $250 million
  • tax rate of 16.5 percent (approx.)

However, Apple annunced later in a press release with an investor update that the company might not be able to achieve the expected results becauase of the Coronavirus outbreak. Worldwide iPhone supply was going to be temporarily constrained according to the press release. While Apple's iphone manufacturing partner sites are located outside the Hubei province (under lockdown) and have reopened, they are ramping up slower than anticipated. Customer demand has also reduced in China as Apple stores and partner brand stores remain closed. The ones that are open are seeing lesser traffic.

Apple Net Sales Q1 2020 and Q1 2019 (in millions):
 Q1 2020Q1 2019
Total Net Sales$91,819$84,310

Apple Net sales by category Q1 2020 (in millions):

 Q1 2020Q1 2019
iPhone$55,957  $51,982
Wearables, Home and Accessories$10,010$7,308
Total Net Sales$91,819$84,310

Sources: Apple q1 2020 results.