Apple’s fiscal first-quarter revenue hit $90.75 billion, exceeding expectations, while earnings per share rose to a March quarter record of $1.53. Apple’s dominant hardware and growing services businesses provide a competitive advantage, with a commitment to the customer experience translating to industry-leading user loyalty scores. The company’s net cash neutral strategy gives confidence that free cash flow will continue to fund dividends and buybacks, making it a “own it, don’t trade it” stock in the portfolio.
The quarterly results showed positive performance, with Apple hitting record numbers for installed base of active devices and services sales. Sales in Greater China exceeded expectations, despite negative growth compared to the previous year. The company also set new sales records in various regions around the world. Additionally, Apple announced a $110 billion share repurchase authorization, signaling strong confidence in the future. CEO Tim Cook emphasized the company’s investments in artificial intelligence, underscoring Apple’s unique combination of hardware, software, and services integration.
Apple’s cash flow and capital allocation were strong, with free cash flow exceeding expectations. The company exited the quarter with a net cash position of about $58 billion and announced an impressive $110 billion share repurchase authorization. Apple also raised its quarterly dividend by 4%, continuing its trend of increasing the payout annually for the past 12 years. The company paid over $27 billion to shareholders during the quarter, including dividends and share repurchases.
In terms of product and services performance, Apple saw record sales in both categories, with the services business reaching an all-time revenue high. The products segment saw strong demand for the iPhone, Mac, and iPad, with the wearables, home, and accessories segment facing a tough comparison from the previous year. The Apple Watch continued to drive growth, with more than half of Fortune 100 companies purchasing Apple Vision Pro units for innovative use cases.
Apple’s guidance for the June quarter is positive, with revenue expected to grow at a low-single-digit percentage rate despite currency headwinds. Services revenues are projected to grow at a double-digit rate, exceeding analyst estimates. iPad sales are also expected to see double-digit growth year-over-year. Operating expenses are forecasted to be in line with expectations. Overall, Apple’s strong performance and positive outlook support a price target increase to $220 from $205.
In conclusion, Apple’s impressive quarterly results, strong cash flow, and capital allocation strategies, combined with positive guidance for the future, position the company for continued growth. With a focus on customer experience, innovation, and AI investments, Apple remains a solid investment for the long term, reflecting its status as a top-performing stock in the portfolio.
