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Apple had a much better quarter than Wall Street anticipated, as consumers proved resilient despite the COVID-19 pandemic. Apple’s stock jumped 6% in after-hours trading to over $400, which would be an all-time high if it holds up.
Apple’s revenue increased 11% to $59.7 billion for the three months ended June 30, the company’s fiscal third quarter of 2020. Analysts had expected revenue to drop 2% to $52.6 billion on average. And earnings per share of $2.58, up 18%, crushed the average forecast of $2.07.
The after-hours stock price jump held even after Apple CFO Luca Maestri disclosed on a call with analysts that this year’s new iPhones would likely be delayed “a few weeks” due to challenges in the supply chain.
The surprise growth, including in iPhone sales, came as the U.S. smartphone market contracted 25% overall in the last quarter, according to research firm Counterpoint. But in many parts of the world, consumer shopping has improved since the worst of the shutdowns in the early spring. And Apple has a robust e-commerce operation selling phones online.
“We’re conscious of the fact that these results stand in stark relief during a time of real economic adversity,” Apple CEO Tim Cook said on a call with analysts. “We do not have a zero sum approach to prosperity and especially in times like this we’re focused on growing the pie, making sure our success isn’t just our success.”
Apple has expanded some of its offerings, through services such as Apple TV+ and Apple News, which bring in monthly subscription fee revenue that can be steadier than those from device sales. Services revenue jumped 15% to $13.2 billion. Apple also met its 2016 goal to double its annual service revenue within four years.
The rally to an all-time high stock price came after Apple shares closed at $384.76 on Thursday with a gain of 31% this year. Rival Dell has gained 15% in 2020 and Hewlett Packard’s stock is off 16%. The S&P 500 Index is up just 1% on the year. Apple also said it would split its stock four to one, which would lower the entry price for investors but would have no financial impact.
The prior big gain in 2020 had prompted Goldman analyst Rod Hall last week to call the rally in Apple’s stock price “unsustainable,” while recommending that investors avoid the stock. He predicted the price would drop $299 in a year.
The next big challenge ahead for Apple is the debut of the 2020 upgrades of the iPhone. The iPhone 12 is rumored to include as many as four different size models, all with 5G capabilities. Apple did not offer a forecast of its next quarter’s results.
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This story was originally featured on Fortune.com