Apple, Facebook Shares Soar After Surge in Revenue
Apple revenue up 54% to a new March quarter record. Facebook shares rise 6% to a new all-time high in pre-market trading.
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- Apple revenue up 54% to a new March quarter record
- Facebook shares rise 6% to a new all-time high in pre-market trading
The world heavyweights in the tech sector this week shatter records and continue to drive strong growth. The latest to deliver their corporate earnings reports on Wednesday were Apple and Facebook. The two tech giants revealed their financial results for the first quarter, beating analyst estimates about earnings and revenue.
Apple Inc. saw a strong boost in sales for the quarter ended March and reported a profit that more than doubled to a record high. The company reported a profit of $23.6bn, while revenue growth arrived at 54% compared to the year-ago quarter, to reach $89.6bn, far exceeding expectations. Apple also announced a 7% increase to its cash dividend to 22 cents a share.
“This quarter reflects both the enduring ways our products have helped our users meet this moment in their own lives, as well as the optimism consumers, seem to feel about better days ahead for all of us,” said Tim Cook, Apple’s CEO.
The Tech Giants Strengthen Their Position
The surprise in the financial statement for the latest quarter was that iPhone sales boosted a large part of the revenue. In the previous quarter, the iPhone category was the slowest-growing and total revenue was mostly driven by iPads, wearables, and services.
“We are proud of our March quarter performance, which included revenue records in each of our geographic segments and strong double-digit growth in each of our product categories, driving our installed base of active devices to an all-time high,” said Luca Maestri, Apple’s CFO in the press release, following the earnings report.
“These results allowed us to generate operating cash flow of $24 billion and return nearly $23 billion to shareholders during the quarter. We are confident in our future and continue to make significant investments to support our long-term plans and enrich our customers’ lives.”
Apple shares jumped 4% in after-hours trading but later subsided and currently indicate a higher open of about 2.3%. The Cupertino, Calif. company declined by 5.6% in the first trimester of 2021. Year-to-date, Apple shares are higher by 3.2%.
Facebook Inc. was the other tech giant to report earnings yesterday after the closing bell. Facebook eclipsed estimates on both earnings and revenue in the first quarter. Earnings arrived at $3.30 per share, vs. $2.37 expected. Revenue came in at $26.17bn, vs $23.67bn forecasted. Daily active users for the quarter landed at 1.88 billion. Revenue for the social media giant was up 48% compared with a year prior. Net income grew to $9.5bn, an increase of 94%, compared with $4.9bn from the year-ago quarter.
“We are pleased with the strength of our advertising revenue growth in the first quarter of 2021, which was driven by a 30% year-over-year increase in the average price per ad and a 12% increase in the number of ads delivered,” Facebook said in the earnings release. “We expect that advertising revenue growth will continue to be primarily driven by price during the rest of 2021.”
Facebook shares spiked over 6% towards a record high of around $326 per share, beating the current all-time high of $313 per share. Year-to-date, the Facebook stock is higher by roughly 20%.