Apple announces Q119 earnings; revenue of $84.3 billion, $4.18 EPS

Apple today announced financial results for its fiscal 2019 first quarter ended December 29, 2018. The Company posted quarterly revenue of $84.3 billion, a decline of 5 percent from the year-ago quarter, and quarterly earnings per diluted share of $4.18, up 7.5 percent. International sales accounted for 62 percent of the quarter’s revenue.

Revenue from iPhone declined 15 percent from the prior year, while total revenue from all other products and services grew 19 percent. Services revenue reached an all-time high of $10.9 billion, up 19 percent over the prior year. Revenue from Mac and Wearables, Home and Accessories also reached all-time highs, growing 9 percent and 33 percent, respectively, and revenue from iPad® grew 17 percent.

“While it was disappointing to miss our revenue guidance, we manage Apple for the long term, and this quarter’s results demonstrate that the underlying strength of our business runs deep and wide,” said Tim Cook, Apple’s CEO, in a statement. “Our active installed base of devices reached an all-time high of 1.4 billion in the first quarter, growing in each of our geographic segments. That’s a great testament to the satisfaction and loyalty of our customers, and it’s driving our Services business to new records thanks to our large and fast-growing ecosystem.”

Segment revenue:
• iPhone: $51.982B vs. $61.104B YOY
• Mac: $7.416B vs. $6.824B YOY
• iPad: $6.729B vs. $5.755B YOY
• Wearables, Home and Accessories: $7.308 vs. $5.481 YOY
• Services: $10.875B vs. $9.129B YOY

Total net sales: $84.310B vs. $88.293B YOY

“We generated very strong operating cash flow of $26.7 billion during the December quarter and set an all-time EPS record of $4.18,” said Luca Maestri, Apple’s CFO, in a statement. “We returned over $13 billion to our investors during the quarter through dividends and share repurchases. Our net cash balance was $130 billion at the end of the quarter, and we continue to target a net cash neutral position over time.”

Apple is providing the following guidance for its fiscal 2019 second quarter:

• revenue between $55 billion and $59 billion
• gross margin between 37 percent and 38 percent
• operating expenses between $8.5 billion and $8.6 billion
• other income/(expense) of $300 million
• tax rate of approximately 17 percent

Apple’s board of directors has declared a cash dividend of $0.73 per share of the Company’s common stock. The dividend is payable on February 14, 2019 to shareholders of record as of the close of business on February 11, 2019.

Apple will provide live streaming of its Q1 2019 financial results conference call beginning at 2:00 p.m. PST on January 29, 2019 at www.apple.com/investor/earnings-call/. This webcast will also be available for replay for approximately two weeks thereafter.

Per Thomson Reuters, analysts’ revenue expectations were in line with Apple’s revised guidance of $84 billion with an EPS of $4.17.

Analysts’ consensus via FactSet expected guidance of $59.3 billion in Q219 revenue.

Per Marketwatch, these were the average analyst revenue expectations for Apple’s product segments:
• iPhone: $52.8B
• iPad: $6.06B
• Mac: $7.33B
• Software and services: $10.82B
• Other: $7.01B

MacDailyNews Take: Apple beat reduced expectations on revenue and EPS. The company was bit light on guidance for revenue (between $55 billion and $59 billion) versus analysts’ consensus of $59.3 billion.

AAPL after hours: $159.21 +$4.65 (+3.01%) @ 4:40PM EST

6 Comments

  1. To me this is the key point!
    Quarterly earnings per diluted share of $4.18, up 7.5 percent yoy!

    Not to shabby ha?

    And

    -Services revenue reached an all-time high of $10.9 billion, up 19 percent. With 62.8 % Gross Margin !!!
    – Revenue from Mac® and Wearables, Home and Accessories also reached all-time highs, growing 9 percent and 33 percent respectively.
    -Revenue from iPad® grew 17 percent.

    Now the so called pundits can see why Apple is so adamant to take this obsessive focus away from iphone units.

  2. I am not a financial wizard. I still don’t understand the desire to be net cash neutral. Do they never want to buy another company? No cushion? I don’t get it.

    If Apple would have had no cash reserves (with no debt) when the hard times hit before SJ’s return in the late 90’s, they would not have made it.

  3. My own humble opinion is that Apple misread the larger market, not just downturns in China. With upgrade cycles lengthening, and the worldwide smart phone saturation, the last thing they should have done was “only” introduce $800+ phones.

    I would bet every Apple share I own that if Apple had offered an upgraded and on par SE, alongside the mid-range XR, and high end Xs models, they would have hit their projected revenue, or closer to it. I imagine millions of people are sitting out this upgrade cycle because the only reasonably priced options are old technology.

    To say nothing of Apple’s insane, almost 40% margins. With Services becoming a major portion of Apple’s business, why not sacrifice 7 or 8% margin to get more phones out there. Once upon a time 30% meant you were killing it! Now it’s not even enough that Apple is shy of 40%… weird.

    Are there many other companies in the world, not exclusively working for governments, that are hitting 40% margin on their products?

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