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 Apple Reports Third Quarter Results
   Thursday, July 30, 2020 4:30:00 PM ET

Revenue up 11 percent and EPS up 18 percent to new June quarter records

CUPERTINO, Calif.--(BUSINESS WIRE)--Apple® today announced financial results for its fiscal 2020 third quarter ended June 27, 2020. The Company posted quarterly revenue of $59.7 billion, an increase of 11 percent from the year-ago quarter, and quarterly earnings per diluted share of $2.58, up 18 percent. International sales accounted for 60 percent of the quarter’s revenue.

“Apple’s record June quarter was driven by double-digit growth in both Products and Services and growth in each of our geographic segments,” said Tim Cook, Apple’s CEO. “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. This is a challenging moment for our communities, and, from Apple’s new $100 million Racial Equity and Justice Initiative to a new commitment to be carbon neutral by 2030, we’re living the principle that what we make and do should create opportunity and leave the world better than we found it.”



“Our June quarter performance was strong evidence of Apple’s ability to innovate and execute during challenging times,” said Luca Maestri, Apple’s CFO. “The record business results drove our active installed base of devices to an all-time high in all of our geographic segments and all major product categories. We grew EPS by 18 percent and generated operating cash flow of $16.3 billion during the quarter, a June quarter record for both metrics.”

Apple’s Board of Directors has declared a cash dividend of $0.82 per share of the Company’s common stock. The dividend is payable on August 13, 2020 to shareholders of record as of the close of business on August 10, 2020.

The Board of Directors has also approved a four-for-one stock split to make the stock more accessible to a broader base of investors. Each Apple shareholder of record at the close of business on August 24, 2020 will receive three additional shares for every share held on the record date, and trading will begin on a split-adjusted basis on August 31, 2020.

Apple will provide live streaming of its Q3 2020 financial results conference call beginning at 2:00 p.m. PT on July 30, 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; the four-for-one stock split; and the commitment to be carbon neutral by 2030. 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, such as a potential finding that the Company has infringed on the intellectual property rights of others; 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

 

Nine Months Ended

 

June 27,
2020

 

June 29,
2019

 

June 27,
2020

 

June 29,
2019

Net sales:

 

 

 

 

 

 

 

Products

$

46,529

 

 

$

42,354

 

 

$

170,598

 

 

$

162,354

 

Services

13,156

 

 

11,455

 

 

39,219

 

 

33,780

 

Total net sales (1)

59,685

 

 

53,809

 

 

209,817

 

 

196,134

 

Cost of sales:

 

 

 

 

 

 

 

Products

32,693

 

 

29,473

 

 

116,089

 

 

109,758

 

Services

4,312

 

 

4,109

 

 

13,461

 

 

12,297

 

Total cost of sales

37,005

 

 

33,582

 

 

129,550

 

 

122,055

 

Gross margin

22,680

 

 

20,227

 

 

80,267

 

 

74,079

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

4,758

 

 

4,257

 

 

13,774

 

 

12,107

 

Selling, general and administrative

4,831

 

 

4,426

 

 

14,980

 

 

13,667

 

Total operating expenses

9,589

 

 

8,683

 

 

28,754

 

 

25,774

 

 

 

 

 

 

 

 

 

Operating income

13,091

 

 

11,544

 

 

51,513

 

 

48,305

 

Other income/(expense), net

46

 

 

367

 

 

677

 

 

1,305

 

Income before provision for income taxes

13,137

 

 

11,911

 

 

52,190

 

 

49,610

 

Provision for income taxes

1,884

 

 

1,867

 

 

7,452

 

 

8,040

 

Net income

$

11,253

 

 

$

10,044

 

 

$

44,738

 

 

$

41,570

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

Basic

$

2.61

 

 

$

2.20

 

 

$

10.25

 

 

$

8.92

 

Diluted

$

2.58

 

 

$

2.18

 

 

$

10.16

 

 

$

8.86

 

Shares used in computing earnings per share:

 

 

 

 

 

 

 

Basic

4,312,573

 

 

4,570,633

 

 

4,362,571

 

 

4,660,175

 

Diluted

4,354,788

 

 

4,601,380

 

 

4,404,695

 

 

4,691,759

 

 

 

 

 

 

 

 

 

(1) Net sales by reportable segment:

 

 

 

 

 

 

 

Americas

$

27,018

 

 

$

25,056

 

 

$

93,858

 

 

$

87,592

 

Europe

14,173

 

 

11,925

 

 

51,740

 

 

45,342

 

Greater China

9,329

 

 

9,157

 

 

32,362

 

 

32,544

 

Japan

4,966

 

 

4,082

 

 

16,395

 

 

16,524

 

Rest of Asia Pacific

4,199

 

 

3,589

 

 

15,462

 

 

14,132

 

Total net sales

$

59,685

 

 

$

53,809

 

 

$

209,817

 

 

$

196,134

 

 

 

 

 

 

 

 

 

(1) Net sales by category:

 

 

 

 

 

 

 

iPhone

$

26,418

 

 

$

25,986

 

 

$

111,337

 

 

$

109,019

 

Mac

7,079

 

 

5,820

 

 

19,590

 

 

18,749

 

iPad

6,582

 

 

5,023

 

 

16,927

 

 

16,624

 

Wearables, Home and Accessories

6,450

 

 

5,525

 

 

22,744

 

 

17,962

 

Services

13,156

 

 

11,455

 

 

39,219

 

 

33,780

 

Total net sales

$

59,685

 

 

$

53,809

 

 

$

209,817

 

 

$

196,134

 

Apple Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

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

 

 

June 27,
2020

 

September 28,
2019

ASSETS:

Current assets:

 

 

 

Cash and cash equivalents

$

33,383

 

 

$

48,844

 

Marketable securities

59,642

 

 

51,713

 

Accounts receivable, net

17,882

 

 

22,926

 

Inventories

3,978

 

 

4,106

 

Vendor non-trade receivables

14,193

 

 

22,878

 

Other current assets

10,987

 

 

12,352

 

Total current assets

140,065

 

 

162,819

 

 

 

 

 

Non-current assets:

 

 

 

Marketable securities

100,592

 

 

105,341

 

Property, plant and equipment, net

35,687

 

 

37,378

 

Other non-current assets

41,000

 

 

32,978

 

Total non-current assets

177,279

 

 

175,697

 

Total assets

$

317,344

 

 

$

338,516

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY:

Current liabilities:

 

 

 

Accounts payable

$

35,325

 

 

$

46,236

 

Other current liabilities

35,005

 

 

37,720

 

Deferred revenue

6,313

 

 

5,522

 

Commercial paper and repurchase agreements

11,166

 

 

5,980

 

Term debt

7,509

 

 

10,260

 

Total current liabilities

95,318

 

 

105,718

 

 

 

 

 

Non-current liabilities:

 

 

 

Term debt

94,048

 

 

91,807

 

Other non-current liabilities

55,696

 

 

50,503

 

Total non-current liabilities

149,744

 

 

142,310

 

Total liabilities

245,062

 

 

248,028

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 4,283,939 and 4,443,236 shares issued and outstanding, respectively

48,696

 

 

45,174

 

Retained earnings

24,136

 

 

45,898

 

Accumulated other comprehensive income/(loss)

(550)

 

 

(584)

 

Total shareholders’ equity

72,282

 

 

90,488

 

Total liabilities and shareholders’ equity

$

317,344

 

 

$

338,516

 

Apple Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In millions)

 

 

Nine Months Ended

 

June 27,
2020

 

June 29,
2019

Cash, cash equivalents and restricted cash, beginning balances

$

50,224

 

 

$

25,913

 

Operating activities:

 

 

 

Net income

44,738

 

 

41,570

 

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

 

 

 

Depreciation and amortization

8,354

 

 

9,368

 

Share-based compensation expense

5,105

 

 

4,569

 

Deferred income tax expense/(benefit)

182

 

 

(38)

 

Other

(94)

 

 

(340)

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable, net

5,149

 

 

9,013

 

Inventories

10

 

 

496

 

Vendor non-trade receivables

8,685

 

 

13,483

 

Other current and non-current assets

(6,760)

 

 

693

 

Accounts payable

(10,787)

 

 

(19,804)

 

Deferred revenue

1,649

 

 

(776)

 

Other current and non-current liabilities

3,867

 

 

(8,753)

 

Cash generated by operating activities

60,098

 

 

49,481

 

Investing activities:

 

 

 

Purchases of marketable securities

(96,606)

 

 

(21,902)

 

Proceeds from maturities of marketable securities

54,865

 

 

26,783

 

Proceeds from sales of marketable securities

39,760

 

 

49,516

 

Payments for acquisition of property, plant and equipment

(5,525)

 

 

(7,718)

 

Payments made in connection with business acquisitions, net

(1,473)

 

 

(611)

 

Purchases of non-marketable securities

(210)

 

 

(632)

 

Proceeds from non-marketable securities

58

 

 

1,526

 

Other

(689)

 

 

(268)

 

Cash generated by/(used in) investing activities

(9,820)

 

 

46,694

 

Financing activities:

 

 

 

Proceeds from issuance of common stock

430

 

 

391

 

Payments for taxes related to net share settlement of equity awards

(3,234)

 

 

(2,626)

 

Payments for dividends and dividend equivalents

(10,570)

 

 

(10,640)

 

Repurchases of common stock

(55,171)

 

 

(49,453)

 

Proceeds from issuance of term debt, net

10,635

 

 

 

Repayments of term debt

(12,629)

 

 

(5,500)

 

Proceeds from/(Repayments of) commercial paper, net

31

 

 

(2,026)

 

Proceeds from repurchase agreements

5,165

 

 

 

Other

(120)

 

 

(83)

 

Cash used in financing activities

(65,463)

 

 

(69,937)

 

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

(15,185)

 

 

26,238

 

Cash, cash equivalents and restricted cash, ending balances

$

35,039

 

 

$

52,151

 

Supplemental cash flow disclosure:

 

 

 

Cash paid for income taxes, net

$

8,410

 

 

$

11,795

 

Cash paid for interest

$

2,275

 

 

$

2,563

 

 

Apple
Press Contact:
Kristin Huguet Quayle, (408) 974-2414
khuguet@apple.com

Investor Relations Contact:
Tejas Gala, (669) 227-2402
tgala@apple.com

Source: Apple Inc.



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