Apple Shares Gain as Tech Giant Moves to Reopen 25 U.S. Stores

Apple said Sunday that more than 100 of its global retail stores have re-opened since the coronavirus pandemic forced closures around the world, with 25 U.S. locations to follow this week.
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Apple Inc.  (AAPL) - Get Report shares jumped higher Monday after the tech giant outlined plans to open more than 25 of its U.S. branded stores this week as economies around the world ease business restrictions and stay-at-home orders.

Apple said Sunday the re-openings were based on local coronavirus case trends as well as guidance from health officials and would include social distancing guidelines, occupancy limits, and customer temperature checks. Apple will also require staff to wear masks while providing them to customers who don't bring their own and conduct 'enhanced deep cleaning' of its displays and surfaces throughout the day.

"Our commitment is to only move forward with a reopening once we’re confident we can safely return to serving customers from our stores," said Dan O'Brien, Apple's retail boss, in a statement posted on the company's website. "In Greater China, we saw the importance of swift action — and the critical importance of social distance — to slow the virus’ spread."

"And, as time has gone on, we’ve continued to refine and expand our in‑store health and safety measures, which have proven so effective in places like Greater China, where our stores have been safely open for months," he added.

Apple shares were marked 13% higher in early trading Monday to change hands at $311.76 each, a move that would lift the stock's year-to-date gain to around 6.2%, just ahead of the 4.8% advance for the Nasdaq.

Apple beat Street estimates for both its top and bottom line over its fiscal second quarter, posting sales of $58.3 billion and earnings of $2.55 per share for the three months ending in March. 

The results were even more impressive considering iPhone revenues fell 6.7% to $29 billion as stores in China, and around the world, were shuttered as a result of the coronavirus outbreak.

Apple said services revenues picked up some of the slack, rising 17% to a record $13.3 billion as shelter-in-place orders attracted new subscribers to the group's suite of cloud-based offerings such as Apple Music and Apple Pay. 

Apple's services subscriber base hit 515 million over the second quarter, Cook said, while its installed base -- a measure of the number of iPhones, iPad, and computers in circulation -- topped 1.5 billion.

The profit margin from its services business, in fact, increased by 100 basis points to 65.4%, well ahead of the group-wide margin of 38.4%, while Apple's overall net cash position stood at $83 billion as of March 31. 

However, a lack of near-term certainty has forced the group to start its second consecutive quarter without providing financial guidance to investors, although it did forecast a currency headwind of $1.5 billion owing to the strength of the U.S. dollar.