Earnings Season: Apple revenues pop 11% with record-breaking quarter

Apple comes out on top with fourth quarter earnings beating estimates and shattering records.

Apple earnings

Apple Q4 2021 headline stats

Apple reported its largest single revenue-generating quarter in Q4 2021 – even with the supply chain issues and the effects of the pandemic still lingering.

This comes after the Californian tech giant’s third quarter revenues missed expectations.

iPads aside, sales of Apple’s key devices were up across the board.

Apple’s fourth quarter 2021 stats are:

• Earnings per share – $2.10 vs $1.89 forecast – 25% year-on-year increase
• Revenue – $123.9 billion vs $118.66 billion forecast – 11% year-on-year increase
• Gross margin – 43.8% vs 41.7% forecast

When broken down into product segments, Apple’s fourth quarter performance looks something like the below:

• iPhone revenue – $71.63 billion vs $68.34 billion forecast – 9% year-on-year increase
• Mac revenue – $10.85 billion vs $9.52 billion forecast – 25% year-on-year increase
• iPad revenue – $7.25 billion vs $8.18 billion forecast – 14% year-on-year decrease
• Services revenue – $19.52 billion vs $18.61 billion forecast – 24% year-on-year increase
• Other products revenue – $14.70 billion vs $14.59 billion forecast – 13% year-on-year increase

A very busy but profitable quarter for Apple then. Q4 covers the busiest shopping period of the year, such as the Thanksgiving-Christmas spending corridor, which has no doubt helped Apple achieve its record-breaking revenues.

Importantly, Apple launched a new iPhone model in the fourth quarter. This is always a headline event in the technology world and helped draw tens of billions in sales. The release of the iPhone 13 saw Apple smartphone sales expand 9% on a yearly basis but were generally slower than sales growth registered by other key market segments.

While iPhone sales slow, other areas take off

Macs took off with the release of a new MacBook Pro model in October. Notably the new model, which retails for $1,999, contains a proprietary Apple chip instead of an Intel one. Will this be standard going forward?

Services, which incorporates Apple Music, Apple TV, iCloud, and the App Store, is now Apple’s most profitable sector with revenues up 25% on an annualised basis.

iPads disappointed with a 14% year-on-year sales decline. This was attributed to the fact Apple couldn’t make enough thanks to pandemic-induced supply issues.

Apple looking to overcome supply chain issues

The company warned in October that supply chains and component sourcing would be difficult in Q4, but the situation appears to have improved.

Apple CEO Tim Cook gave an update on the supply side of things in a post-earnings investors call. According to Cook, December was a worse month for sourcing components and chipsets than September, due to increased Omicron pressure, but predicts things will be better by March.

“Our biggest issue is chip supply, it’s chip supply on legacy nodes,” Cook said. “And we’re doing okay on the leading edge stuff.”

For context, leading edge chips are the processors that make iPhones and other devices work. They’re more modern and updated compared with legacy nodes, which cover less complex functions like power and displays.

Apple typically doesn’t give guidance for the coming quarter and didn’t do so again. If it can overcome its supply issues, then expect another high performing quarter in Q1 2022.

Be sure to check out our earnings calendar to see who is reporting and when this earnings season.