The global pandemic has already seen the US economy sink into the fastest recession in its history. It would be an understatement to say that coronavirus has affected normal life. Apart from the health system, businesses have faced the brunt of the only precautions – quarantine and lockdown. Despite stimulus packages from the government, the US economy broke records when it plunged 32.9% in the second quarter of 2020.
Amid all these economic uncertainties, tech companies have been recording good quarters as announced by Q3 earnings. Amazon, Facebook, and Google all broke past expectations, with Amazon nearly doubling its profits! But the biggest news of all came last Friday on July 31st when Apple beat Saudi Arabia’s state-owned oil company Saudi Aramco.
The US tech giant recorded a market valuation of $1.84 trillion compared to Saudi Aramco’s $1.76 trillion when trade closed on Friday. CNBC reported that Apple shares closed up by 10.47% on Friday to achieve the feat. Apple was the first publicly traded US company to reach $1 trillion back in August 2018. In June 2020, it again became the first US company to reach $1.5 trillion despite the global pandemic, and now it is nearing the $2 trillion mark.
The stock rise is directly accountable to Apple’s third-quarter earnings announced on Thursday. Apple posted $59.7 billion quarterly revenue, which is an increase from last year’s Q3 by 11%. In a press release, Apple CEO Tim Cook said, “Apple’s record June quarter was driven by double-digit growth in both Products and Services and growth in each of our geographic segments. In uncertain times, this performance is a testament to the important role our products play in our customers’ lives and to Apple’s relentless innovation.”
The strong earnings call is courtesy of Apple’s international sales, which accounted for 60 percent of the quarter’s revenue. The quarter saw some reliable results across their product line too.
- $26.4 billion iPhone revenue: iPhone revenue grew by 2% for the quarter. And this is also the first time Apple accounted for iPhone SE 2020 sales in their quarter. The $399 budget iPhone gives users a cheaper way to get into the Apple ecosystem. Although in the earnings call, Apple also confirmed the delay of the new iPhone. The supply of the new iPhone to be available “a few weeks later.”
- $13.1 billion Services revenue: The Apple Ecosystem from Apple TV to Apple Music and many more have been a strong pull in the user fan base if you take out the iPhone sales services accounts for half of the remaining revenue.
- $7.08 billion Mac revenue and $6.58 billion iPad revenue: With the latest MacBook 13 pro update now, all MacBooks have the new keyboards instead of the butterfly keyboard that were giving them a bad name. With so many people currently staying at home or working from home, it has increased the need for work devices and media consumption devices.
- $6.4 billion Wearables revenue: While wearables sales growth was not as expected, sales were still good when you consider that it is a non-holiday quarter.
The market valuation comes accompanied by handsome earnings per share at $2.58. Apple has also approved a 4-to-1 stock split saying that “ .” The 4-to-1 split means anyone with a $400 share will now get four $100 shares.