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Apple earnings: Sales beat expectations led by iPhone and wearables

Daniel Howley
Technology Editor

Apple (AAPL) reported its Q1 2020 earnings results on Tuesday, and beat Wall Street analysts’ top and bottom line estimates thanks to strong sales through the 2019 holiday shopping season.

Here are the most important numbers from the report, as well as what analysts had projected for the quarter as compiled by Bloomberg.

Revenue: $91.8 billion versus $88.4 billion expected

Earnings per share: $4.99 versus $4.55 expected

iPhone revenue: $55.96 billion versus $51.50 billion expected

Services revenue: $12.72 billion versus 12.98 billion expected

Q2 2020 guidance was also above expectations for the tech giant, coming in at $63 billion to $67 billion compared to Wall Street estimates of $62.33 billion.

The company’s stock was up about 3% shortly after the announcement.

The results mark a significant turnaround for Apple just a year after slowing sales in China prompted CEO Tim Cook to issue a rare guidance revision ahead of the company's Q1 2019 earnings report.

Much of Apple's growth as of late has been attributed to demand for the company's AirPods and Apple Watch, as well as the continued expansion of its service business.

In fact, Gene Munster of Loop Ventures believes Apple's services and wearables businesses combined will make up 30% of the company's total revenue in 2020.

There can be no discussion about Apple, however, without mentioning the enormous expectations for the rumored launch of the company’s 5G-capable iPhone lineup in September. 

Apple CEO Tim Cook attends the world premiere of Apple's "The Morning Show" at David Geffen Hall on Monday, Oct. 28, 2019, in New York. (Photo by Evan Agostini/Invision/AP)

That device could spur a sales supercycle for Apple, which would result in a major increase in the number of users upgrading their old phones to the newer 5G models.

Some analysts, including Nomura Instinet’s Jeffrey Kvaal, however, believe the supercycle argument is overblown, and might not pan out the way other analysts suggest.

"The incremental utility to the consumer seems limited as well," Kvaal notes. "Consumers can already consume as much video as they would like and new 5G applications seem some distance off."

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