“Apple has posted the biggest quarterly profit of all time despite a fall in iPhone sales,” James Titcomb reports for The Telegraph. “The world’s biggest company posted profits of $20.1 billion (£14 billion) in the crucial final three months of the year, breaking its own record set two years ago.”
“It came after the release of the £999 iPhone X in November, the biggest update of the handset to date, as well as the release of the iPhone 8 in September,” Titcomb reports. “Although Apple sold 77 million iPhones in the three month period, a 1 percent fall from last year, the higher price of the new handsets meant revenues from selling iPhones increased. Sales of the iPad increased marginally, while those of Apple’s Mac computers fell. Sales of ‘other products’ – a group that includes the Apple Watch and Apple TV – were up 36 percent.”
“‘We’re thrilled to report the biggest quarter in Apple’s history, with broad-based growth that included the highest revenue ever from a new iPhone lineup,’ Mr Cook said. He added that 1.3bn Apple devices are now in use, up from 1bn two years ago,” Titcomb reports. “Apple is the world’s biggest company and is often tipped to be the first to break the one-trillion-dollar value mark, but shares have wavered in recent weeks amid fears that it may be cutting back iPhone X production.”
Read more in the full article here.
MacDailyNews Take: Nowhere in the article is the rather salient point mentioned that this was a 13-week first quarter in 2018 vs. 14-week first quarter in fiscal Q1 2017.
From Apple’s Q1118 Conference Call yesterday evening:
Starting with revenue, we’re reporting an all-time record, $88.3 billion, up nearly $10 billion or 13% over the prior record set last year. It is our fifth consecutive quarter of accelerating revenue growth… When we look at average revenue per week, our growth rate was even higher 21% with growth across all product categories for the third consecutive quarter. — Apple CEO Tim Cook
During the quarter, we sold 77.3 million iPhones, the highest number ever for a 13-week quarter. Average weekly iPhone sales were up 6% compared to December quarter last year with growth in every region of the world despite the staggered launch of iPhone 10. We established all-time iPhone revenue record in nearly every market we track with double-digit growth in all of our geographic segments. iPhone ASP increased to $796 from $695 a year ago, driven primarily by the launch of iPhone X and the success of iPhone 8 and 8 Plus. — Apple CFO Luca Maestri
The revenue growth from iPhone across all the geographic segments was in the double-digits. And I think as Luca said earlier, when you change that for an average weekly sales basis, it’s actually 22%. And so it was a stellar quarter for iPhone. The iPhone 10 was the most popular and that’s particularly noteworthy given that we didn’t start shipping until early November, and we’re constrained for a while. The team did a great job of getting into supply demand balance there in December. But since the launch of iPhone 10, it has been the most popular iPhone every week, every week sales. And that is even through today, actually through January. — Apple CEO Tim Cook
Keep in mind that this year had 13 weeks, last year had 14 weeks. And so even though we were reporting a similar year-over-year growth for Greater China, if you change that reporting to an average weekly sales, which probably is much better way to look at it, there was actually a really nice acceleration. And specifically the numbers this quarter as reported are 11% increase for Greater China year-over-year but on an average weekly revenue basis, we were up 19%. — Apple CEO Tim Cook
As for those “fears” over iPhone X production: Fools and their money are soon parted.
SEE ALSO:
So much for worries over Apple’s iPhone X – February 1, 2018
MacDailyNews presents live notes from Apple’s Q118 conference call – February 1, 2018
Apple smashes Street with biggest quarter in company history – February 1, 2018
And how do you top that YOY?
By unleashing the monster iPhone X Plus this holiday season, which will drive profit through the roof again.
Tim’s already got Q4 2018 in the bag.
Selling fewer iPhones, but increasing the average selling price by $100 per iPhone is one hell of an accomplishment and I would imagine that Apple’s rivals would be thrilled if they could ever match that.
When Apple released the iPhone SE, analysts were concerned that the ASP for iPhones would diminish. Now that the ASP has risen so significantly, you would expect the analysts to be absolutely delighted, but they appear to be keeping any excitement firmly under control.
But anonymous sources said that Apple was canceling the iPhone X because it was a failure! The sources said it!
To be fair, they have pretty well stopped producing iPhone X and won’t be making many more …….. until after the Chinese New Year, when the factories start running again. Just like how it happens every year and it’s always gleefully seized upon by certain people as a sign that iPhone must be failing.
I warned last year that we would be reading reports of that nature this year and I have no doubt that we will again be reading of slowing orders for next year’s iPhone components and manufacturing in the same way before another twelve months has passed.
I know you guys are investors, and from that single filter I can understand your elation. The “but” is there is no “but”.
For my next phone I will choose the one that makes my branded vendor the most profit… /s
Apple customers are buying because of brand and status and are happily throwing their money at Apple without thinking (that is what you’re implying) is a fairytale, a bedtime story you tell yourself so you feel better.
That’s what you comprehended, but it’s not what I said.
Your comprehension is not my problem.
What I was saying, is why would a buyer cheer their sellers profits..
All that profit did was to cause Apple’s share price to sink even further. I don’t see how that is anything to be bragging about. Although Apple is able to make money, no one on Wall Street likes Apple’s strategy of how Tim Cook is running the company. I remember all the boasting of Apple shareholders saying how Amazon didn’t make any profits. What good does that do to laugh at Amazon? Amazon is already considered a far better investment than Apple will ever be. Everything Jeff Bezos does helps to increase Amazon’s overall value. What exactly is Tim Cook doing? Creating a company that can easily lose value despite large profits. Is that really a good thing for shareholders?
When the biggest investors are happily paying $1500 for a single share for Amazon stock and balking at paying $170 a share for Apple stock, then something has to be really wrong with Apple or the way it’s being run.
I really feel stupid because I simply don’t understand the math behind that reasoning. No bank would ever give me credit based on future earnings. Collateral is king and it would seem Apple has it. Still, Amazon is valued incredibly higher than Apple.
Tim Cook is busy crowing about Apple’s “amazing” numbers and he doesn’t even bother to look at Apple’s falling share price. Does that make any sense, whatsoever?
I’m an AAPL investor and if I understood exactly what makes the price rise and fall, I’d be a very rich man, but the fact is that while there are certain predictable events which happen and affect the stock price, for the most part, it’s a random roller coaster ride and the best you can do is to try and get on and off at advantageous points along it’s journey.
Fortunately with Apple, the average trajectory is healthily upwards, but there are plenty of times where the price has been dropping alarmingly while all the indicators are that it should logically have been rising.
At the moment, AAPL is dropping quite sharply. I would expect this to be a brief over-reaction which will be corrected very soon once the reality of what Apple has actually achieved starts to be understood by the people who should really have immediately understood that sort of thing while it was being announced yesterday evening.
In practice, the stock market is as irrational as its human investors. On top of that, there is a strong undercurrent of market manipulation and rumor-mongering to sow FUD and create volatility and churn. Investment firms thrive on volatility and churn, which create profits from transactions regardless of the direction of the market.
A rational investor looks at near-term and long-term trends and economic conditions. A rational investor considers P/E and PEG (Price/Earnings relative to growth). A rational investor considers debt, free cash flow, and many other factors. But the rational aspects are only a piece of the equation. Emotion plays a big role, and human beings are inherently flawed when it comes to risk assessment and risk/reward decision making. Many people invest on growth and momentum – an approach which eventually led to the Dot Com bust in 2001 as investors eventually realized that many of those companies were not producing profits and were unlikely to grow sufficiently to cover their extraordinary P/E multiples.
One of the factors driving the temporary drop in AAPL is the small “shortfall” in iPhone sales. Few people are considering the 13 versus 14 week comparison in YoY. Another factor is likely the 5% drop in Mac unit sales. Apple is still considered to be a computer company at its core. Again, the 13 versus 14 week YoY comparison makes the Mac unit sales appear worse than reality. In addition, it has only been a short time since the so-called “battery-gate” publicity, and major investors were likely looking for an opportunity to reduce their exposure. On top of all of this is the so-called Law of Large Numbers – the fact that Apple is already massive and that maintaining growth will be increasingly difficult unless Apple expands into other product areas. So far, however, Apple has defied the LoLN for a decade, increasing annual revenues and profits to previously unheard of levels. Naturally, that means that the pessimists – the “Apple is doomed” group – are always anticipating the edge of the cliff.
Over short periods, the market – and AAPL – will often stray from what you and I might expect based on value-based analyses. But, sooner or later, the market has to answer to the financial fundamentals. in many ways, however, the market does not care about the past and only cares about the present for a short time. Even as the latest financial results are released, what tends to drive the market is speculation on the future performance of a company.
I understand all that you listed.
But the “experts” and “analysts” that write these reports for the regular guys to read are just that, experts. They should understand the 12 week vs 13 week and adjust their opinions to “accurately” report so the little guys get truthful news.
This is just one factor of many that the so called “analysts” obfuscate for their own greedy needs. But the regular news media lie to us all the time about all the other news so these guys are just doing what they do. Lie, omit, ignore or create news.
The strange thing is that when Apple reports at the end of a longer quarter, the analysts are quick to point out that a longer quarter means that Apple’s great results aren’t as good as they might appear to be at first glance. However when Apple reports amazingly impressive results after a shorter quarter ………. crickets.
Stock is down more then $4.00 WTF????
Apparently the market is unhappy about Apple’s revenue projection for this quarter.
I bet that Apple beats that handily since there is still a lot of pent up demand for the iPhoneX.
The stock has dropped $16 since the 24th. Plenty of profit taking going on.
The ups and downs happen a lot with AAPL but the company is sound, makes excellent profits and the stock overrall is on an upward trajectory.
Go Apple! Yay Apple! Awesome Apple … you are the best and Microsoft stinks!
OK, now that we got the fanboy stuff out of the way, let’s just remember where all those profits come from. Well, my wife dropped her 6S Plus twice so almost $400 there. I can’t wait for Christmas so I can save $10 on an iPad. I guess what I’m saying is that Apple treats us fans the way they know they can. Better a challenging consumer than an accepting fanboy.
Mark — all Apple since 1986!!
Just imagine what those numbers would be if they had released a great Mac Pro tower that was expandable and was what every pro wanted in fall of 2017.