Apple reports slight increase in fiscal 2020 second quarter revenue amid global economic crisis

But iPhone sales dipped nearly 7 per cent from a year ago

Dev Kundaliya
01 May 2020

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Apple posted its fiscal 2020 second-quarter results on Thursday, giving first indication of how the company is performing as the world economy dips into its first recession in more than a decade.

In an earnings call, the company reported a slight increase in its quarterly revenue, which edged up by 1 per cent to $58.3 billion, from $58 billion year ago. Earnings per share for the quarter increased to $2.55 from $2.46 a year ago.

Apple said its iPhone fell in the second quarter, down nearly 7 per cent from a year ago, to $28.96 billion.

Sales of iPads and Macs also dipped in the second-quarter, down 10 per cent and 2.9 per cent, respectively.

The shortfall, however, was partially compensated by a 16 per cent increase in services revenue, which includes Apple Music, iCloud, and other subscriptions. As more people now stay at home amid coronavirus pandemic, they are buying more games in the App Store and looking for services like Apple TV Plus.

Services revenue for the quarter soared to $13.3 billion, while sales from wearables increased 23 per cent to $6.3 billion.

Apple CEO Tim Cook said that the company had 515 million subscribers for apps and services in March quarter, up by 125 million from a year ago.

The revenue figures released by Apple on Thursday are far better than analysts' estimates.

Following the onset of COVID-19 pandemic, Apple was forced to temporarily shut down its local factories in China, which make most of its iPhones and other gadgets.

While those factories have reopened now, the closures created ripple effects that could delay the launch of Apple's next iPhone models by a month or so this fall. Moreover, Apple's stores still remain closed in many countries that are currently fighting to contain the spread of the virus.

In earnings call, Cook praised the Apple's response to the outbreak and assured that the company's global supply chain is profoundly durable and resilient.

"We have shown the consistent ability to meet and manage temporary supply challenges like those caused by Covid-19," he added.

Tim Cook sees no need to diversify supply chain from China:

"I conclude that if you look at the shock to the supply chain that took place this quarter - for it to come back up so quickly really demonstrates that it's durable and resilient. And so I feel good about where we are."
— Patrick McGee (@PatrickMcGee_) April 30, 2020

Earlier in February, Apple had stated that it could miss revenue targets for the quarter ending in March due to the coronavirus outbreak in China.

In January, the company reported its earnings for the quarter ending December 2019, exceeding profit estimates by Wall Street analysts. The iPhone maker posted earnings of $4.99 per share for the quarter, above estimates of $4.55 per share.