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Warren Buffett's Apple Soars on Strong 3rd-Quarter Sales Growth

Company announces 4-for-1 stock split as shares top $400

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James Li
Jul 30, 2020
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Shares of Apple Inc. (

AAPL, Financial), the top holding of Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial), surged over 6% in aftermarket trading on Thursday on the back of reporting third-quarter results that smashed analyst estimates.

For the quarter ending June 30, the Cupertino, California-based consumer electronics giant reported net income of $11.25 billion, or $2.58 in diluted earnings per share, compared with net income of $10.04 billion, or $2.18 in diluted earnings per share, in the prior-year quarter.


Company sets new record June-quarter sales and earnings growth

Apple Chief Financial Officer Luca Maestri said June-quarter earnings growth of 18% reflected the company’s “ability to innovate and execute during challenging times.” Revenues were $59.7 billion, outperforming the Refinitiv estimate of $52.6 billion and up 11% from the prior-year quarter, driven by double-digit growth in the company’s products and services businesses as well as growth in each of Apple’s geographic segments according to CEO Tim Cook.


Cook mentioned during the earnings call that Services set a new record in China, a region that saw high demand for the company’s new Macs and iPads. Maestri added that the iPhone SE saw strong response from customers around the globe, a trend that management expects to continue for the September quarter.

Stock exceeds $400 in aftermarket trading

Shares of Apple traded over $408 after the close, up over 6% from the closing price of $380.16. To make the stock more accessible to a broader range of investors, Apple’s board of directors approved a 4-for-1 stock split effective Aug. 31.


GuruFocus ranks Apple’s profitability 10 out of 10 on several positive investing signs, which include a high Piotroski F-score of 8, a 4.5-star business predictability rank and an operating margin that outperforms over 96% of global competitors.


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The Dow Jones Industrial Average closed at 26,313.65, down 225.92 points or 0.85% from the previous close of 26,539.57 while the Nasdaq Composite Index closed at 10,587.81, up 44.87 points or 0.43% from the previous close of 10,542.94.


Stocks were pressured Thursday morning on the back of the second-quarter U.S. gross domestic product tumbling at an annual rate of 32.9% according to advance estimates released by the Bureau of Economic Analysis. The department said in its press release that the decline in GDP reflects a wide range of Covid-19 pandemic responses, which included stay-at-home orders and government stimulus payments, resulting in reduced consumer and business spending.

Disclosure: Long Apple.

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