Apple smashes Street with biggest quarter in company history

Apple today announced financial results for its fiscal 2018 first quarter ended December 30, 2017. The Company posted quarterly revenue of $88.3 billion, an increase of 13 percent from the year-ago quarter and an all-time record, and quarterly earnings per diluted share of $3.89, up 16 percent, also an all-time record. International sales accounted for 65 percent of the quarter’s revenue.

A reminder that this was a 13-week first quarter in 2018 vs. 14-week first quarter in fiscal Q1 2017.

These results were versus Thomson Reuters consensus estimates of $3.86 per share and revenue of $87.28 billion

“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. iPhone X surpassed our expectations and has been our top-selling iPhone every week since it shipped in November,” said Tim Cook, Apple’s CEO, in a statement. “We’ve also achieved a significant milestone with our active installed base of devices reaching 1.3 billion in January. That’s an increase of 30 percent in just two years, which is a testament to the popularity of our products and the loyalty and satisfaction of our customers.”

“Thanks to great operational and business performance, we achieved all-time record profitability during the quarter, with EPS up 16 percent,” said Luca Maestri, Apple’s CFO, in a statement. “Cash flow from operations was very strong at $28.3 billion, and we returned $14.5 billion to investors through our capital return program.”

• iPhone: 77.316 million units, $61.576 billion revenue (YOY change: – 1% units, +13% revenue)
• iPad: 13.170 million units, $5.862 billion revenue (YOY change: +1% units, +6% revenue)
• Mac: 5.112 million units, $6.895 billion revenue (YOY change: -5% units, -5% revenue)
• Services: $8.471 billion (YOY change: +18% revenue)
• Other Products: $5.489 billion (YOY change: +36% revenue)

– “Services” includes revenue from Digital Content and Services, AppleCare, Apple Pay, licensing and other services. Services revenue in the fourth quarter of 2017 included a favorable one-time adjustment of $640 million due to a change in estimate based on the availability of additional supporting information.
– “Other Products” includes sales of Apple TV, Apple Watch, Beats products, iPod touch and Apple-branded and third-party accessories.

Apple is providing the following guidance for its fiscal 2018 second quarter:

• revenue between $60 billion and $62 billion
• gross margin between 38 percent and 38.5 percent
• operating expenses between $7.6 billion and $7.7 billion
• other income/(expense) of $300 million
• tax rate of approximately 15 percent

Apple’s board of directors has declared a cash dividend of $0.63 per share of the Company’s common stock. The dividend is payable on February 15, 2018 to shareholders of record as of the close of business on February 12, 2018.

Thomson Reuters consensus estimate expected earnings of $3.86 per share, revenue of $87.28 billion, and Q218 revenue guidance of $65.73 billion. StreetAccount expected Q218 margin guidance of 38.9%. FactSet expected iPhone unit sales of 80 million.

MacDailyNews Take: Guidance may be an issue, but, obviously:

Boom!

SEE ALSO:
MacDailyNews presents live notes from Apple’s Q118 conference call – February 1, 2018

45 Comments

  1. And of course AAPL is down on the news. Whisper number was $90 billion on the top line, so “only” $88.3 billion is a disappointment to the wall street pump-and-dump machine.

      1. But see, if revenue had been $100 billion, it would have been MORE! As long as I can think up a higher number than Apple makes in revenue, it’ll always be time to LET TIMMY GO!!!

  2. The guidance was likely too low for them as well, even though it would be a record (Apple) Q2. The stock will rebound and do well going forward when the enormity of the numbers sinks in.

    1. Cook also said that the sales of iPhone X s “off the chart”.
      There was no super cycle materialized on the X. Stop hyping, and stop hiding actual sales number of the X.
      The phone sales is now more than 70% of Apple’s total revenue (i.e. overpriced). Something to worry about. Take the phone business out of Cook’s hands, and make it into a separate company, and put more emphasis on the Mac, which is less than 10% of the revenue.

        1. Did you rad the entire conference call? Sales of the X DID NOT reach the expectation, and this is the fact. And Apple is not releasing the number of the X sold. It is the fact that the sales of the X was not as expected. But the other model sold well. But I am more worried about Apple becoming a one rick pony company. Smartphone sales are reaching the plateau and if Apple continues to concentrate resources in the phone business, and when people are becoming keenly aware of the overpricing (that’s why the X sales was not as good as expected), the collapse is just as easy to come. That’s what I am saying. I lament the loss of innocence of Apple. Phone is fine. Godd for Apple. But, you know….

        2. And my prediction is that, Cook & Co., learned that consumers are smarter than they thought they were. Apple will regroup and come up with 2 or 3 or whatever number of the iPhone models next cycle. BUT at the more sustainable (still high, but sustainable) price. To do that, they have to reset a few things, and one of which is completely cancel the current X altogether with its pricing. They can’t keep overpricing next models this fall, which are suppose to be better than the current X, but price them even higher because they are better? They can’t do that anymore. They cannot use the current X pricing as a benchmark any more. I hope the fever will cool down within Apple. I bet the pricing this fall will come down to more reasonable level.
          Cook continues to utter, as if its his sour grape, that the sales of the X iPhone X “surpassed our expectations” or “off the chart” etc, when the reality was not so. There is a strong sign that consumers are finally realizing the apparent overpricing, and becoming more levelheaded. Mr. Cook, pick up the sign and come back to more sustainable strategy before it’s too late. Remember, Apple is now even more dependent on the iPhone sales ever before with its 70+% revenue proportion. Crazy…
          No conspiracy, no doom and gloom, just trying to be logical. And I love Apple and want them continuing to succeed and make reasonable and sustainable money.

          1. The point is: “analysts” are never pleased. Apple posted recorded quarters to be punished by “disappointing “ results. IPhone X was introduced shortly after the 8, was highest priced iPhone ever, had “notchgate” and is still the best selling model every week since intro. Somehow you can parce this into negativity. I believe it is a bold sucessful design and consumers are voting with their wallets. As a longtime shareholder and Apple consumer, I’m pleased.

  3. Apple meets or exceeds its guidance usually.

    the problem is that Analysts have their own (often fantasy) guesswork.
    the next March (fiscal second) quarter analysts estimates were way too high originally and in the last week it kept coming down to around 60 b coinciding with what Apple just announced.

    Problem is people equate ‘missing’ analysts original fantasy March numbers with Apple missing it’s own guidance (which are two different things).

    —–

    that said I believe Apple could have performed better if they had done a few things:
    example:
    Mac sales are down (although — as usual — still making more than iPad ) . I believe if they had run some Mac MARKETING — zero ads through Christmas like zero marketing for years, and done some upgrading (where the 32 GB Macbook Pro and the promised Mini ?) they would have a gain instead of drop..
    and other stuff like missing the HomePod launch for Christmas.

      1. Yup.. and taking that into consideration.. Apple blowes past all street analcyst expectation..not just their own guidance.

        Their equivalent growth is 21%. Yoy… not 13%

    1. Apple could REALLY have performed better (and let us all be clear on what this means, Apple could have had a BIGGER WORLD’S BIGGEST PROFIT EVER) if they had just picked up loose change off the street. Anything you add to whatever’s already the BIGGEST makes it… BIGGER!

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