MacDailyNews presents live notes from Apple’s Q319 conference call

MacDailyNews presents live notes from Apple’s Q319 Conference Call with analysts starting at 5pm EDT/2pm PDT today, July 30, 2019.

Apple will provide live audio streaming of its Q319 Results Conference Call using Apple’s industry-leading QuickTime multimedia software. This stream is best experienced on an iPhone, iPad, or iPod touch using Safari on iOS 10 or later; a Mac using Safari on macOS Sierra 10.12 or later; or a PC using Windows 10 and Microsoft Edge. Streaming to Apple TV via AirPlay requires an Apple TV (2nd generation or later) with the latest Apple TV software or tvOS.

The live webcast will begin at 5pm EDT/2pm PDT today here.

The company posted quarterly revenue of $53.8 billion, the biggest June quarter ever, an increase of 1 percent from the year-ago quarter, and quarterly earnings per diluted share of $2.18, down 7 percent. International sales accounted for 59 percent of the quarter’s revenue.

For Q419, Apple guided for revenue between $61 billion and $64 billion.

Live notes from Apple’s Q319 Conference Call in reverse chronological order:

• AAPL after hours: $217.65 +$8.87 (+4.25%) @ 6:02PM EDT
• End of conference call

• Cook on 5G iPhones: We don’t comment on future products; with respect to 5G, most people would tell you that we are in extremely early innings of 5G and even more so worldwide. We are very confident in our position.
• Cook: We think Catalyst (iOS to Mac apps) is huge
• Cook: We are seeing good developer interest in virtually everything introduced during WWDC 2019
• Maestri: Apple will continue to invest in marketing and advertising, especially for new services and product launches
• This is why installed base continues to grow even as iPhone revenue declines in a give 90-day window
• Cook: Installed bas doesn’t correlate to the 90-day clock due to switchers, secondary market, and upgrades (people are holding onto devices longer, but they’re staying in the ecosystem), and new users
• Cook: Installed base is a function of upgrade and the time between upgrades, switchers, robustness of the secondary market, and new users
• Maestri: We feel very good about our iPhone channel inventories for the quarter

• AAPL after hours: $217.80 +$9.02 (+4.32%) @ 5:50PM EDT

• Cook on new Mac Pro: We’re working and investing currently on continuing to build the Mac Pro here in the U.S
• Cook on U.S.-China trade: The vast majority of Apple products are kind of made everywhere; that’s the nature of a global supply chain; I think that will carry the day

• Cook: We’re placing big bets on things like augmented reality
• Cook: India bounced back during the quarter, we returned to growth there, about which we’re very happy
• Cook: Wearables are doing extremely well; we stuck with that when others perhaps didn’t. Apple is in a strong position
• Cook: We have the strongest product portfolio ever with strong products on the way; the pipeline is full
• Cook: iPhone trade-in in retail and financing led retail and online to sales growth in June
• Maestri: Apple News+ and Apple Channels available right now; new Apple services are coming some of which will have a trial period
• Apple expects to benefit from leverage and from cost savings due to favorable component market
• Apple Card rolls out in August and Apple Arcade and Apple TV+ will come this fall helping to power Services growth
• Apple confident of goal of increasing paid subscription goal of surpassing half a billion
• Apple confident they will double Services between 2016 and 2020
• AppleCare hit an all-time record during June
• Apple install base continues to grow across all major categories which is very important for the Services business

• AAPL after hours: $217.50 +$8.72 (+4.18%) @ 5:35PM EDT

• Cook: Apple is happy with the progress in China; there are several things going on [in China] that are quite positive
• Cook: China government stimulus (“very bold” VAT reduction), trade-ins, and growing engagement in growing Apple ecosystem helped in China
• Q419 guidance includes and estimated almost $1 billion in foregin exchange headwind during the quarter
• Maestri: Apple expects to have continued strong growth from non-iPhone categories
• Analysts’ questions begin

• Apple’s board of directors has declared a cash dividend of $0.77 per share payable on August 15, 2019 to shareholders of record as of the close of business on August 12, 2019
• Apple is providing the following guidance for its fiscal 2019 fourth quarter:
– revenue between $61 billion and $64 billion
– gross margin between 37.5 percent and 38.5 percent
– operating expenses between $8.7 billion and $8.8 billion
– other income/(expense) of $200 million
– tax rate of approximately 16.5 percent

• Apple on way to net cash neutral potion over time
• $108 billion total debt
• $211 billion in cash and marketable securities on hand

• Apple Business Chat is a dynamic way to support and interact with customers for many businesses
• Maestri: iPhone and iPad are overwhelmingly the choice for bankers around the world

• 506 total Apple Retail Stores worldwide
• iPhone trade-in program over 5X larger vs. last year
• Wearables revenue accelerated to over $5.5 billion, setting a June quarter record
• Over half of iPad customers during the quarter were new to iPad
• Mac revenue up 11% YOY; signifantly outpacing global PC industry
• Nearly 1000 Best Buy store across the U.S. now authorized to repair Apple products
• Apple now has 420+ million paid subscriptions; Apple on way to surpassing goal of 500 million subscribers in 2020
• iPhone US survey by 451 Research: iPhone XR, XS, XS Max user satisfaction = 99%

• Net sales by category:
– iPhone: $25.986 billion
– Mac: $5.820 billion
– iPad: $5.023 billion
– Wearables, Home and Accessories: $5.525 billion
– Services: $11.455 billion

• Maestri: Apple returned to growth despite significant currency headwinds during the quarter

• Cook: “We have several new products that we can’t wait to show you.”

• Apple thinks customers are going to love what delivers deliver with these new tools
• RealityKit is a new developer framework for virtually lifelike AR
• ARKit 3 uses on-device realtime machine learning
• Important new tools for developers debuted at WWDC 2019

• Apple wants to make the user experience more effortless and intuitive across macOS, iOS, iPadOS, watchOS, and tvOS
• macOS Catalina’s Catalyst will help bring iOS apps to the Mac; Apple expects to see a wave of new apps for the Mac arriving as early as this fall
• ECG app expanded to 31 countries and regions around the world with more to come this year
• watchOS 6 is a major step forward for Apple Watch users, with a new App Store directly accessible from the Watch
• tvOS 13 will make the big screen experience even more personal
• iPad is getting it’s own OS, iPadOS. It will take the iPad experience to a whole new level
• Cook: Apple wants to own and control primary technologies that make up their products (Jobs Doctrine)
• Apple has acquired Intel’s modem business 2nd largest in terms of dollars, largest ever in terms of employees

• Mac ecosystem about to get a big boost with tools for developers to bring iOS apps to macOS

• Mac Pro available this fall
• Strong performance by MacBook Pro and MacBook Air
• Mac: enormous amount to be excited about
• Apple’s Wearables business is now bigger than 60% of companies in the Fortune 500
• Apple Watch sales set a new quarterly record; 75% of customers are new to Apple Watch
• Cook: Apple Card rollout planned for August
• Transit integration is a major component of digital wallet
• Apple Pay now in 47 markets worldwide
• Apple Services new all-time record of $11.455 billion
• iPhone install base reached a new all-time high
• Cook: iPhone results are encouraging, including strong customer response to our in-store trade-in and financing program
• Cook in statement: “These results are promising across all our geographic segments.”
• Wearables+Services now approach the size of a Fortune 50 company
• Cook: We’re thrilled to report a return to growth

• Apple returned over $21 billion to shareholders during the quarter, including $17 billion through open market repurchases of almost 88 million Apple shares, and $3.6 billion in dividends and equivalents
• Apple’s Q319 performance drove strong operating cash flow of $11.6 billion
• International sales accounted for 59 percent of the quarter’s revenue.
• Apple delivered quarterly earnings per diluted share of $2.18, down 7 percent
• Apple posted quarterly revenue of $53.8 billion, an increase of 1 percent from the year-ago quarter
• Apple today announced financial results for its fiscal 2019 third quarter ended June 29, 2019.

• Cook statement: “This was our biggest June quarter ever — driven by all-time record revenue from Services, accelerating growth from Wearables, strong performance from iPad and Mac and significant improvement in iPhone trends.”
• CEO Cook in statement: “The balance of calendar 2019 will be an exciting period, with major launches on all of our platforms, new services and several new products.”

• AAPL after hours: $217.60 +$8.82 (+4.22%) @ 4:54PM EDT
• AAPL after hours: $215.98 +$7.20 (+3.45%) @ 4:48PM EDT

9 Comments

  1. Thanks to the seeds I planted back in 1979, Apple’s new products are all thanks to me. I am the pipe in pipeline and a very big pipe it is I have, too.

  2. “ Cook on new Mac Pro: We’re working and investing currently on continuing to build the Mac Pro here in the U.S”

    Guess Trump was right, again.

    1. Hmmm… back a few days ago they announced they would be shutting down the MacPro assembly plant in Texas and moving MacPro assembly to China.

      Next I heard that the reason they wanted no tariff on parts was because they wanted to continue production in the United States.

      Now Cook is saying that they are “working and investing currently on continuing to build the Mac Pro here in the U.S.”

      Ya just never know with this guy.

      1. No. “Sources” reported that Apple was going to move Mac Pro production to China. Tim’s announcement today is from the horse’s mouth – two very different sources of information.

        Apple has reportedly requested tarrif relief for components of the MacPro planned to be manufactured in China, they have made no announcements to confirm or deny these reports.

        It’s really not good enough to attack or praise Apple for what anonymous people say or report about it. You only have to look at the difference between what politicians say about the economy versus official agencies responsible for collecting the data and producing the actual stats to see what harm can come of believing unverified sources.

  3. Meanwhile over in Korea, Samsung has just reported a massive drop in profits for the second successive quarter.

    Samsung’s operating profit for this quarter has dropped by 55.6%, which follows a drop for the last quarter of more than half. The profits in it’s chip business dropped by 71%, while it’s mobile business was 42% less profitable. They explained that while shipments increased, the increase was mainly at the lower end of the market, but their sales at the higher end of the market fell due to “weak sales momentum”.

    Just think how different things could have been for them if they had maintained a healthy relationship with what used to be their biggest customer instead of trying to compete with them. Alternatively, just imagine the global headlines if Apple ever reported a disastrous drop in profits on that scale !

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