Apple set to break $100bn quarterly sales record as tech boom continues
Apple’s bullish run shows no signs of slowing down, with the tech giant expected to join an exclusive club of companies to have earned revenue of more than $100bn (£730m) in a single quarter.
Analysts have predicted quarterly revenue of $102.6bn for the iPhone maker, which would mark year-on-year growth of 12 per cent — its fastest in two and a half years.
Only a handful of companies have posted $100bn in quarterly sales, including Walmart and Exxon Mobil. Amazon is also expected to achieve this milestone when it reports earnings next month.
Apple’s net profit is projected to climb to $23.6bn, which would be the largest quarterly profit ever recorded by a private corporation.
The opening quarter is often one of the most important for Apple, which has traditionally benefited from a sales bump over the Christmas period.
The Silicon Valley giant will be hoping for a sales boost through pent-up demand for the new iPhone 12, released in October.
The company has also been looking to generate increased revenue from its service offerings such as Apple TV Plus and Apple Music. Its new subscription bundle offering Apple One also launched last year.
Michael Hewson, chief market analyst at CMC Markets, said the $100bn revenue mark would be an “extraordinary achievement”, but warned it “did seem a bit of a stretch”.
“Consumers globally have held back on spending and retail sales in China are still well below the levels last seen at the end of 2019,” he said.
However, Hewson said the market was still banking on a record quarter for Apple.
“With shares already at a record high, valuing the company at $2.4 trillion, it would take quite a miss to undermine sentiment around a company that continues to generate cash at record rates.”
The tech rally marches on
Apple’s earnings tonight come amid what is expected to be a bumper period of earnings for tech giants cashing in increased demands for their products and services during the pandemic.
Microsoft last night posted a rise in revenue and record profit of $15.5bn thanks to sharp growth in its cloud computing division.
All eyes will now be on Facebook and Tesla, which are due to report their quarterly figures tonight.
Both firms are tipped to beat expectations, though Neil Wilson at Markets.com warned Tesla had “a lot to live up to” after a colossal rally that has seen its share price double since November and made boss Elon Musk the world’s richest man.
“Whilst investors are increasingly confident Tesla will continue to generate profits and free cash flow is going to improve, justifying these kinds of valuation multiples is tough and will depend on a lot more than vehicle sales,” he said. “Ongoing software subscription revenue streams – some of which are potentially 100 per cent margin – will be key.”