Apple beats Street with best Q2 ever

Apple today beat the Street by announcing financial results for its fiscal 2018 second quarter ended March 31, 2018. The company posted quarterly revenue of $61.1 billion, an increase of 16 percent from the year-ago quarter, and quarterly earnings per diluted share of $2.73, up 30 percent. International sales accounted for 65 percent of the quarter’s revenue.

“We’re thrilled to report our best March quarter ever, with strong revenue growth in iPhone, Services and Wearables,” said Tim Cook, Apple’s CEO. “Customers chose iPhone X more than any other iPhone each week in the March quarter, just as they did following its launch in the December quarter. We also grew revenue in all of our geographic segments, with over 20% growth in Greater China and Japan.”

“Our business performed extremely well during the March quarter, as we grew earnings per share by 30 percent and generated over $15 billion in operating cash flow,” said Luca Maestri, Apple’s CFO. “With the greater flexibility we now have from access to our global cash, we can more efficiently invest in our US operations and work toward a more optimal capital structure. Given our confidence in Apple’s future, we are very happy to announce that our Board has approved a new $100 billion share repurchase authorization and a 16 percent increase in our quarterly dividend.”

Data Summary:

• iPhone: 52.217 million units (vs. 50.763 million units, +3% YOY), $38.032 billion revenue (vs. $33.249 billion, +14% YOY)
Mac: 4.078 million units (vs. 4.199 million units, -3% YOY), $5.848 billion revenue (vs. $5.844 billion, 0% YOY)
iPad: 9.113 million units (vs. 8.922 million units, +2% YOY), $4.113 billion revenue (vs. $3.889 billion, +6% YOY)
Services: $9.190 billion revenue (vs. $7.041 billion revenue, +31% YOY)
Other Products: $3.954 billion revenue (vs. $2.873 billion, +38% YOY)

“Services” includes revenue from Digital Content and Services, AppleCare, Apple Pay, licensing and other services.
“Other Products” includes sales of AirPods, Apple TV, Apple Watch, Beats products, HomePod, iPod touch and other Apple-branded and third-party accessories.

Thomson Reuters consensus estimates called for revenue of $60.82 billion and $2.67 EPS. Consensus estimates called for 52.54 million iPhone units sold in the quarter (StreetAccount estimate) with and ASP of $741. Fiscal Q3 revenue guidance: $51.61 billion expected by Thomson Reuters consensus.

The Company will complete the execution of the previous $210 billion share repurchase authorization during the third fiscal quarter. Reflecting the approved increase, the Board has declared a cash dividend of $0.73 per share of Apple’s common stock payable on May 17, 2018 to shareholders of record as of the close of business on May 14, 2018.

The Company also expects to continue to net-share-settle vesting restricted stock units.

From the inception of its capital return program in August 2012 through March 2018, Apple has returned $275 billion to shareholders, including $200 billion in share repurchases. The management team and the Board will continue to review each element of the capital return program regularly and plan to provide an update on the program on an annual basis.

Apple is providing the following guidance for its fiscal 2018 third quarter:
• revenue between $51.5 billion and $53.5 billion
• gross margin between 38 percent and 38.5 percent
• operating expenses between $7.7 billion and $7.8 billion
• other income/(expense) of $400 million
• tax rate of approximately 14.5 percent

MacDailyNews Take: All of the iPhone X “concern” was bullshit.

In after hours Nasdaq trading, Apple (AAPL) is up $6.92, +4.09%, to $176.02 per share.

Profit from the painfully gullible.MacDailyNews, December 26, 2017

SEE ALSO:
Uh, yeah, about those iPhone X ‘concerns’ from analysts: Never mind – May 1, 2018
Apple stock tumbles on one poorly-sourced report of low iPhone X demand – December 26, 2017
Apple and suppliers shares drop on report of weak iPhone X demand – December 26, 2017

49 Comments

  1. Ugh. The company is on autopilot. It’s nice they keep raking in money, but the results point to slow growth. 2% growth for iPhone, loss for the Mac thanks to poor management.

    This is nowhere near the economic boom the trumpanzees promised. Pretty small globally considering Apple is supposed to be making inroads in emerging markets which have 3+ times the rate of economic growth that Apple just reported.

    I just wish Cook would leave. There is no impressive hardware innovation pointing to future acceleration of Apple growth. There is no vision pointing to new capabilities Apple can deliver users. It is all about railroading users into subscriptions and “services”.

    I can’t stand his empty rhetoric:
    “We have the best pipeline of products and services that we’ve ever had.”
    “I could not be prouder…”
    “… and adding new features soon.”
    “In terms of longer term, we’re on target to our goal …”
    re consumer data: “We also collect much less data than others do.”
    “I continue to believe China is a phenomenal country …”
    “We price for the value we’re delivering.”
    “We still believe that over time, every phone sold will be a smartphone.”

    Whatever. Apple is slower and more bureaucratic than ever. Software and hardware quality no longer stand above the competition. Apple isn’t outpacing the competition in emerging markets and it’s doing a shitty job keeping its core Mac business vibrant anywhere. No, Tim, you’re not delivering new products, you’re increasing prices while dropping features. You’re all in on iOS and subscription based computing and overpriced “other” fashion accessories while dropping critical ecosystem products that users used to love.

    It took all of 6 minutes before Tim was bragging how many paid subscriptions Apple had. Next most important thing on his mind was “wearables”. Well goody that you have new watch band colors this year Cook. Who cares how many overpriced poor sounding headphones you push out?

    Where are the Macs????? Oh yeah, they declined in sales YoY. What are you going to do about it Cook???? The surprise is that the Macs haven’t dropped worse given Apple’s inability to price them correctly or advertise them.

    Cook is actively killing personal computing so they can extract more in subscriptions every day from users, with poor intermittent effort.

    Finally, the claim Cook made about the iPhone X topping sales every week is total BS. He’s comparing the X to a specific color/memory configuration of other models. If you compare all minor models of iPhone SE versus 7, 7+, 8, 8+ versus X … the picture tells a very different story. What do you expect, Cook can’t possibly admit that the X was a failure after claiming it’s what Apple is going to produce for the next decade. It’s clear he doesn’t give a shit about personal computing.

    To the pottymouths: the analysts correctly pegged this quarter’s earnings very well. It’s a teeny tiny bit better than last year. Nowhere near the massive growth that the dreamers here imagined would rocket Apple past $1T valuation.

    Basically this reconfirms that Apple is no longer interested in making a full range of products to empower the end user. It is a corporation, big and bloated, that will decide what features you need and will restrict your choice so you get to pay more for it, thanks to the walled garden. Cook couldn’t be happier to kill off the Mac and everything that made personal computing great in the past.

    Investors: it’s not a growth stock anymore. You’ve got an unimaginative beancounter running the show now.

    1. 30% yoy growth in earnings is a ” teeny tiny bit ” to you ? … it happens on autopilot ?

      Though i have my own frustration, like many here with Apple…. Iphone, Applewatch and Financial performance/managemnet are not some if them …

      I think you are trolling a bit.. even going as far as insinuating( totaly baselessly and presumptuously) that Tim is lying on a conferance call to shareholdrrs…
      it
      a bit too much… Mikie

      1. I am not Mikie.

        30% growth in profits is coming from pushing people to subscriptions while hardware continues to get dumbed down. I am not a fan of a company abusing its market power to extract more money while doing nothing to provide a better value to the user. Cook is just collecting money off of Jobs’ products.

        Go ahead and roll around in your money. Cook is doing a shitty job setting up Apple with healthy diverse products for the future. Unless of course watch bands and magazines are your idea of future products you want to pay the Apple premium to have.

        Nobdy is minding the store while the money comes in. What does Cook’s successor do when the pipeline is revealed for the empty vessel it is?

    2. “loss for the Mac thanks to”
      The very clear intention to kill the Mac… like the Apple II before it.

      “‘impressive hardware innovation”
      You’re right, there’s nothing impressive about a phone processor that can beat some current shipping desktop PC processors in benchmarks.

      “core Mac business”
      LOLOLOL! The Mac hasn’t been core since… well, since the iPhone shipped. They’re neat machines for creating iOS software… do they do anything else? Email maybe?

      “Who cares how many overpriced poor sounding headphones you push out?”
      Oddly enough, the shareholders…

      “everything that made personal computing great in the past.”
      Like 40 column green blocky text!!

      Please, you kids, get off his lawn!

  2. MacDailyNews: Please now make a list of all the naysayer analysts by name. Publish their headlines and who carried them, causing the stock price to fall. They do this trick every earnings session. Time to call them out!

    1. IPhone X can be great and sell well and Cook can still be a visionless caretaker who’s presiding over a significant, measurable decline in software and hardware quality. The two conditions are not mutually exclusive. Jobs left Cook the iPhone heavy train. Cook is riding it.

      1. My point exactly.

        I am however willing to say the X hype is bullshit. It’s not the future of iPhones, unless Apple wants to play second fiddle to Samsung innovation for the next decade. At some point Apple is going to have to return to an innovative stance where they are first to market with a product or feature that provides end user value and that NO OTHER COMPANY OFFERS. Haven’t seen that for 7 years now.

  3. The funny thing is. They have been playing the same game before again and again, Playing Apple down. Why still then does the mass even follow their Painfully Inaccurate Guess at all.

  4. Now is a good time for Apple to drastically drop the Mac prices. After all the Mac has become an almost negligible part of Apple’s business, yet it plays a key role for developers. In particular, increased sales of Macbooks (to STEM K12 segment, which will need “trucks” in the future*) would literally put other pc makers in a tight financial spot.
    To save face, Apple could make a few changes to “account” for the price drop, such as using an ARM processor.

    (*)alternately, Apple could make the iPad a serious development platform, which it isn’t right now. Kids (and others) should be able to develop stand-alone apps on the iPad. Sadly, Swift Playgrounds don’t offer that possibility (yet?). A decent enhancement of the “Files” system, allowing the organisation of dissimilar files and references (aliases don’t work for now) into projects is long overdue.

    1. iOS Apps are sandboxed to manage its own files. There may be a need for Apple to fundamentally change the sandbox model in iOS to allow Apps to access non media (audio/video) files in a ‘globally’ visible file system.

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