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Classified in: Science and technology, Business, Covid-19 virus
Subjects: EARNINGS, Conference Call, Webcast

Apple Reports Fourth Quarter Results


Apple® today announced financial results for its fiscal 2020 fourth quarter ended September 26, 2020. The Company posted record September quarter revenue of $64.7 billion and quarterly earnings per diluted share of $0.73. International sales accounted for 59 percent of the quarter's revenue.

"Apple capped off a fiscal year defined by innovation in the face of adversity with a September quarter record, led by all-time records for Mac and Services," said Tim Cook, Apple's CEO. "Despite the ongoing impacts of COVID-19, Apple is in the midst of our most prolific product introduction period ever, and the early response to all our new products, led by our first 5G-enabled iPhone lineup, has been tremendously positive. From remote learning to the home office, Apple products have been a window to the world for users as the pandemic continues, and our teams have met the needs of this moment with creativity, passion, and the kinds of big ideas that only Apple can deliver."

"Our outstanding September quarter performance concludes a remarkable fiscal year, where we established new all-time records for revenue, earnings per share, and free cash flow, in spite of an extremely volatile and challenging macro environment," said Luca Maestri, Apple's CFO. "Our sales results and the unmatched loyalty of our customers drove our active installed base of devices to an all-time high in all of our major product categories. We also returned nearly $22 billion to shareholders during the quarter, as we maintain our target of reaching a net cash neutral position over time."

Apple's Board of Directors has declared a cash dividend of $0.205 per share of the Company's common stock. The dividend is payable on November 12, 2020 to shareholders of record as of the close of business on November 9, 2020.

Apple will provide live streaming of its Q4 2020 financial results conference call beginning at 2:00 p.m. PT on October 29, 2020 at apple.com/investor/earnings-call/. This webcast will also be available for replay for approximately two weeks thereafter.

Apple periodically provides information for investors on its corporate website, apple.com, and its investor relations website, investor.apple.com. This includes press releases and other information about financial performance, reports filed or furnished with the SEC, information on corporate governance, and details related to its annual meeting of shareholders.

This press release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include without limitation those about the Company's expectations regarding the impact of the COVID-19 pandemic; anticipated revenue, gross margin, operating expenses, other income/(expense), and tax rate; plans for return of capital; and our goal of maintaining a net cash neutral position. These statements involve risks and uncertainties, and actual results may differ materially from any future results expressed or implied by the forward-looking statements. Risks and uncertainties include without limitation: the effect of the COVID-19 pandemic on the Company's business, results of operations, financial condition, and stock price; the effect of global and regional economic conditions on the Company's business, including effects on purchasing decisions by consumers and businesses; the ability of the Company to compete in markets that are highly competitive and subject to rapid technological change; the ability of the Company to manage frequent introductions and transitions of products and services, including delivering to the marketplace, and stimulating customer demand for, new products, services, and technological innovations on a timely basis; the effect that shifts in the mix of products and services and in the geographic, currency, or channel mix, component cost increases, increases in the cost of acquiring and delivering content for the Company's services, price competition, or the introduction of new products or services, including new products or services with higher cost structures, could have on the Company's gross margin; the dependency of the Company on the performance of distributors of the Company's products, including cellular network carriers and other resellers; the risk of write-downs on the value of inventory and other assets and purchase commitment cancellation risk; the continued availability on acceptable terms, or at all, of certain components, services, and new technologies essential to the Company's business, including components and technologies that may only be available from single or limited sources; the dependency of the Company on manufacturing and logistics services provided by third parties, many of which are located outside of the US and which may affect the quality, quantity, or cost of products manufactured or services rendered to the Company; the effect of product and services design and manufacturing defects on the Company's financial performance and reputation; the dependency of the Company on third-party intellectual property and digital content, which may not be available to the Company on commercially reasonable terms or at all; the dependency of the Company on support from third-party software developers to develop and maintain software applications and services for the Company's products; the impact of unfavorable legal proceedings or government investigations; the impact of complex and changing laws and regulations worldwide, which expose the Company to potential liabilities, increased costs, and other adverse effects on the Company's business; the ability of the Company to manage risks associated with the Company's retail stores; the ability of the Company to manage risks associated with the Company's investments in new business strategies and acquisitions; the impact on the Company's business and reputation from information technology system failures, network disruptions, or losses or unauthorized access to, or release of, confidential information; the ability of the Company to comply with laws and regulations regarding data protection; the continued service and availability of key executives and employees; political events, international trade disputes, war, terrorism, natural disasters, public health issues, and other business interruptions that could disrupt supply or delivery of, or demand for, the Company's products; financial risks, including risks relating to currency fluctuations, credit risks, and fluctuations in the market value of the Company's investment portfolio; and changes in tax rates and exposure to additional tax liabilities. More information on these risks and other potential factors that could affect the Company's business and financial results is included in the Company's filings with the SEC, including in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

Apple revolutionized personal technology with the introduction of the Macintosh in 1984. Today, Apple leads the world in innovation with iPhone, iPad, Mac, Apple Watch, and Apple TV. Apple's five software platforms ? iOS, iPadOS, macOS, watchOS, and tvOS ? provide seamless experiences across all Apple devices and empower people with breakthrough services including the App Store, Apple Music, Apple Pay, and iCloud. Apple's more than 100,000 employees are dedicated to making the best products on earth, and to leaving the world better than we found it.

NOTE TO EDITORS: For additional information visit Apple Newsroom (www.apple.com/newsroom), or call Apple's Media Helpline at (408) 974-2042.

© 2020 Apple Inc. All rights reserved. Apple and the Apple logo are trademarks of Apple. Other company and product names may be trademarks of their respective owners.

Apple Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In millions, except number of shares which are reflected in thousands and per share amounts)

 

 

Three Months Ended

 

Twelve Months Ended

 

September 26,
2020

 

September 28,
2019

 

September 26,
2020

 

September 28,
2019

Net sales:

 

 

 

 

 

 

 

Products

$

50,149

 

 

$

51,529

 

 

$

220,747

 

 

$

213,883

 

Services

14,549

 

 

12,511

 

 

53,768

 

 

46,291

 

Total net sales (1)

64,698

 

 

64,040

 

 

274,515

 

 

260,174

 

Cost of sales:

 

 

 

 

 

 

 

Products

35,197

 

 

35,238

 

 

151,286

 

 

144,996

 

Services

4,812

 

 

4,489

 

 

18,273

 

 

16,786

 

Total cost of sales

40,009

 

 

39,727

 

 

169,559

 

 

161,782

 

Gross margin

24,689

 

 

24,313

 

 

104,956

 

 

98,392

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

4,978

 

 

4,110

 

 

18,752

 

 

16,217

 

Selling, general and administrative

4,936

 

 

4,578

 

 

19,916

 

 

18,245

 

Total operating expenses

9,914

 

 

8,688

 

 

38,668

 

 

34,462

 

 

 

 

 

 

 

 

 

Operating income

14,775

 

 

15,625

 

 

66,288

 

 

63,930

 

Other income/(expense), net

126

 

 

502

 

 

803

 

 

1,807

 

Income before provision for income taxes

14,901

 

 

16,127

 

 

67,091

 

 

65,737

 

Provision for income taxes

2,228

 

 

2,441

 

 

9,680

 

 

10,481

 

Net income

$

12,673

 

 

$

13,686

 

 

$

57,411

 

 

$

55,256

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

Basic

$

0.74

 

 

$

0.76

 

 

$

3.31

 

 

$

2.99

 

Diluted

$

0.73

 

 

$

0.76

 

 

$

3.28

 

 

$

2.97

 

Shares used in computing earnings per share:

 

 

 

 

 

 

 

Basic

17,057,622

 

 

17,963,249

 

 

17,352,119

 

 

18,471,336

 

Diluted

17,256,521

 

 

18,081,493

 

 

17,528,214

 

 

18,595,651

 

 

 

 

 

 

 

 

 

(1) Net sales by reportable segment:

 

 

 

 

 

 

 

Americas

$

30,698

 

 

$

29,322

 

 

$

124,556

 

 

$

116,914

 

Europe

16,900

 

 

14,946

 

 

68,640

 

 

60,288

 

Greater China

7,946

 

 

11,134

 

 

40,308

 

 

43,678

 

Japan

5,023

 

 

4,982

 

 

21,418

 

 

21,506

 

Rest of Asia Pacific

4,131

 

 

3,656

 

 

19,593

 

 

17,788

 

Total net sales

$

64,698

 

 

$

64,040

 

 

$

274,515

 

 

$

260,174

 

 

 

 

 

 

 

 

 

(1) Net sales by category:

 

 

 

 

 

 

 

iPhone

$

26,444

 

 

$

33,362

 

 

$

137,781

 

 

$

142,381

 

Mac

9,032

 

 

6,991

 

 

28,622

 

 

25,740

 

iPad

6,797

 

 

4,656

 

 

23,724

 

 

21,280

 

Wearables, Home and Accessories

7,876

 

 

6,520

 

 

30,620

 

 

24,482

 

Services

14,549

 

 

12,511

 

 

53,768

 

 

46,291

 

Total net sales

$

64,698

 

 

$

64,040

 

 

$

274,515

 

 

$

260,174

 

Apple Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In millions, except number of shares which are reflected in thousands and par value)

 

September 26,
2020

 

September 28,
2019

ASSETS:

Current assets:

 

 

 

Cash and cash equivalents

$

38,016

 

 

$

48,844

 

Marketable securities

52,927

 

 

51,713

 

Accounts receivable, net

16,120

 

 

22,926

 

Inventories

4,061

 

 

4,106

 

Vendor non-trade receivables

21,325

 

 

22,878

 

Other current assets

11,264

 

 

12,352

 

Total current assets

143,713

 

 

162,819

 

 

 

 

 

Non-current assets:

 

 

 

Marketable securities

100,887

 

 

105,341

 

Property, plant and equipment, net

36,766

 

 

37,378

 

Other non-current assets

42,522

 

 

32,978

 

Total non-current assets

180,175

 

 

175,697

 

Total assets

$

323,888

 

 

$

338,516

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY:

Current liabilities:

 

 

 

Accounts payable

$

42,296

 

 

$

46,236

 

Other current liabilities

42,684

 

 

37,720

 

Deferred revenue

6,643

 

 

5,522

 

Commercial paper

4,996

 

 

5,980

 

Term debt

8,773

 

 

10,260

 

Total current liabilities

105,392

 

 

105,718

 

 

 

 

 

Non-current liabilities:

 

 

 

Term debt

98,667

 

 

91,807

 

Other non-current liabilities

54,490

 

 

50,503

 

Total non-current liabilities

153,157

 

 

142,310

 

Total liabilities

258,549

 

 

248,028

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

Common stock and additional paid-in capital, $0.00001 par value: 50,400,000 shares authorized; 16,976,763 and 17,772,945 shares issued and outstanding, respectively

50,779

 

 

45,174

 

Retained earnings

14,966

 

 

45,898

 

Accumulated other comprehensive income/(loss)

(406)

 

 

(584)

 

Total shareholders' equity

65,339

 

 

90,488

 

Total liabilities and shareholders' equity

$

323,888

 

 

$

338,516

 

Apple Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In millions)

 

 

Twelve Months Ended

 

September 26,
2020

 

September 28,
2019

Cash, cash equivalents and restricted cash, beginning balances

$

50,224

 

 

$

25,913

 

Operating activities:

 

 

 

Net income

57,411

 

 

55,256

 

Adjustments to reconcile net income to cash generated by operating activities:

 

 

 

Depreciation and amortization

11,056

 

 

12,547

 

Share-based compensation expense

6,829

 

 

6,068

 

Deferred income tax benefit

(215)

 

 

(340)

 

Other

(97)

 

 

(652)

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable, net

6,917

 

 

245

 

Inventories

(127)

 

 

(289)

 

Vendor non-trade receivables

1,553

 

 

2,931

 

Other current and non-current assets

(9,588)

 

 

873

 

Accounts payable

(4,062)

 

 

(1,923)

 

Deferred revenue

2,081

 

 

(625)

 

Other current and non-current liabilities

8,916

 

 

(4,700)

 

Cash generated by operating activities

80,674

 

 

69,391

 

Investing activities:

 

 

 

Purchases of marketable securities

(114,938)

 

 

(39,630)

 

Proceeds from maturities of marketable securities

69,918

 

 

40,102

 

Proceeds from sales of marketable securities

50,473

 

 

56,988

 

Payments for acquisition of property, plant and equipment

(7,309)

 

 

(10,495)

 

Payments made in connection with business acquisitions, net

(1,524)

 

 

(624)

 

Purchases of non-marketable securities

(210)

 

 

(1,001)

 

Proceeds from non-marketable securities

92

 

 

1,634

 

Other

(791)

 

 

(1,078)

 

Cash generated by/(used in) investing activities

(4,289)

 

 

45,896

 

Financing activities:

 

 

 

Proceeds from issuance of common stock

880

 

 

781

 

Payments for taxes related to net share settlement of equity awards

(3,634)

 

 

(2,817)

 

Payments for dividends and dividend equivalents

(14,081)

 

 

(14,119)

 

Repurchases of common stock

(72,358)

 

 

(66,897)

 

Proceeds from issuance of term debt, net

16,091

 

 

6,963

 

Repayments of term debt

(12,629)

 

 

(8,805)

 

Repayments of commercial paper, net

(963)

 

 

(5,977)

 

Other

(126)

 

 

(105)

 

Cash used in financing activities

(86,820)

 

 

(90,976)

 

Increase/(Decrease) in cash, cash equivalents and restricted cash

(10,435)

 

 

24,311

 

Cash, cash equivalents and restricted cash, ending balances

$

39,789

 

 

$

50,224

 

Supplemental cash flow disclosure:

 

 

 

Cash paid for income taxes, net

$

9,501

 

 

$

15,263

 

Cash paid for interest

$

3,002

 

 

$

3,423

 

 


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