Apple destroys Street with highest Q4 revenue ever

Apple today announced financial results for its fiscal 2019 fourth quarter ended September 28, 2019. The Company posted quarterly revenue of $64 billion, an increase of 2 percent from the year-ago quarter, and quarterly earnings per diluted share of $3.03, up 4 percent. International sales accounted for 60 percent of the quarter’s revenue.

“We concluded a groundbreaking fiscal 2019 with our highest Q4 revenue ever, fueled by accelerating growth from Services, Wearables and iPad,” said Tim Cook, Apple’s CEO, in a statement. “With customers and reviewers raving about the new generation of iPhones, today’s debut of new, noise-cancelling AirPods Pro, the hotly-anticipated arrival of Apple TV+ just two days away, and our best lineup of products and services ever, we’re very optimistic about what the holiday quarter has in store.”

“Our strong business performance drove record Q4 EPS of $3.03 and record Q4 operating cash flow of $19.9 billion,” said Luca Maestri, Apple’s CFO, in a statement. “We also returned over $21 billion to shareholders, including almost $18 billion in share repurchases and $3.5 billion in dividends and equivalents, as we continue on our path to reaching a net cash neutral position over time.”

Q419 net sales by category:

• iPhone: $33.362 billion
• Services: $12.511 billion
• Mac: $6.991 billion
• Wearables, Home and Accessories: $6.520 billion
• iPad: $4.656 billion

Apple is providing the following guidance for its fiscal 2020 first quarter:

• revenue between $85.5 billion and $89.5 billion
• gross margin between 37.5 percent and 38.5 percent
• operating expenses between $9.6 billion and $9.8 billion
• other income/(expense) of $200 million
• tax rate of approximately 16.5 percent

Prior to Apple’s earnings report, the Refinitiv consensus estimates were:

• Earnings per share: $2.84 (vs. $3.30 actual)
• Revenue: $62.99 billion (vs. $64 billion actual)
• iPhone revenue: $32.42 billion (vs. $33.362 billion actual)
• Services revenue: $12.15 billion (vs. $12.511 billion actual)
• Q1 revenue guidance: $86.92 billion (vs. $85.5 billion to $89.5 billion actual vs. $84.3 billion YOY)

Apple’s board of directors has declared a cash dividend of $0.77 per share of the Company’s common stock. The dividend is payable on November 14, 2019 to shareholders of record as of the close of business on November 11, 2019.

MacDailyNews Take:


      1. Earnings more than 16% higher than average street projections does qualify as “destroying” street expectations.

        Revenue less than 2% above projections,
        iPhone revenues less than 3% above projections, and
        Services revenues less than 3% above projections
        do not qualify as “destroying” street expectations.

        Apple had a very good quarter. Very good. But let’s not dropy into fan boiism.

      2. That’s simply not true. There’s a range of analysts and most of them are quite accurate. They would be more accurate if Apple bothered to release more investor information as they did in the past. For example, Cook went out of his way to avoid telling what percentage of iPhone buyers also purchased Airpods when Daryanani directly asked. Is this something to hide? Why? Analysts will run the gross numbers and will be pilloried by the Apple fanboys if they are a few percent off.

        Note also that Maestri’s go-to explanation for low Apple guidance is fluctuation in exchange rates. That is highly misleading to say the least. Currency fluctuation have a microscopic effect on Apple compared to supply costs, stock buybacks, and other discretionary expenses. He is simply dodging simple financial questions.

        Apple steered very clear of any political topic that investors should know about as well: how much in tariffs is Apple shouldering? It’s irresponsible to not tell your investors.

        1. Mike, Apple used to release more sales information, but it was the only company in the industry that did. As a result, Apple’s true sales were being compared with estimated sales for its competitors. After years of this unfair situation (Apple only counted end-user sales, while the estimates included stock that had merely been shipped to retailers) the company decided to level the playing field.

      1. Is “destroying the street” something we should be measuring? I couldn’t care less what traders think will make them the most money. They aren’t in the game for anyone but themselves.

        I am more concerned about the long term fundamentals. I see no reason to expect Apple to outperform in the near future. Apple’s very future depends on Cook walking a tightrope, keeping Xi on one side and Tariff Donald on the other side completely pacified. That’s a very bad position to be in, but Cook chose to put all manufacturing in China, so it’s on him.

        Over the last year, AAPL has underperformed the NASDAQ 100. In the report today, Apple reported only a 2% growth to its top line, at a time when Goeb’s favorite political orangutan claimed that he would usher in 3-6% growth or more. Apple iPhone sales fell 2% in China and earned 9% less overall and future guidance from Apple, inadequate as it is, was very restrained. Timmy and Co. isn’t predicting a breakout year ahead.

        Destroying Wall Street is very nice. Having deep pockets to buy back company shares to goose the EPS is very convenient. Unfortunately, low growth is the new normal, and Apple is not looking immune to the receding economic tide. It is more dependent on discretionary consumer spending than ever. Too bad, really. It would be nice to have some recession-proof businesses left: education, industrial and scientific computing, new lines of software that actually make money, entry level computers for emerging markets, durable workstations with keyboards immune to the environment for the dirty real world. A comprehensive range of home networking stuff. Apple gave all those markets away. Instead we all get to wait and find out if Apple’s TV content push will make up the slack (pun intended). No doubt Goeb will turn off Fox & invite all his SJW friends over to watch Apple TV. That is sure to make Apple lots of money next year. Let’s wait for his personal review of the Morning Show.

  1. Tim’s plan to diversify Apple’s business is working like a charm. He must be considered one of the great CEOs of our time. Great products, great services, and all with a commitment to a better, greener world.

    1. He’s hardly perfect, and I have my own beefs with things he hasn’t delivered that I want, and I certainly don’t like the way that nearly all American companies in China are kowtowing to the CP, but he has definitely pulled off one of the best post founder CEO performances in business history.

      Other companies have had to go through two or three or four Chief execs after losing a charismatic and visionary founder in order to get back on a new track, and some never have really.

      E.g., whatever you think of Bill Gates personally he built an amazingly successful company.

      Which Steve Ballmer nearly ran into a ditch, destroying Microsoft phone business altogether, e.g., leaving his successor to come from behind, although he has done a good job.

      There are many other such examples, making Cook’s success all the more singular.

  2. Apple continues to underperform with the Mac while making an increasing share of its income renting out media by the month. We see where the priorities lie and they show a company no longer interested in giving people the freedom of operating without Big Brother. Apple now wants to be Big Brother, keeping a tracker on your wrist, iAds on your apps, and you on subscription for everything. All its new disposable sealed things practically must have AppleCare and other services in order to do anything …

    EPS looks improved mainly because 88 million AAPL shares were repurchased.

    Also: the iPhone 11 apparently isn’t as hot as MDN hypes it to be, down 9% YOY.

    Year over year results: 2019 versus 2018

    • iPhone: 3Q2019 $33.36B / 3Q2018 $37.2B, down 9%
    • Services: 3Q2019 $12.51B / 3Q2018 $10.0B, up 18%
    • Mac: 3Q2019 $6.99B / 3Q2018 $7.4B, down 6.7%
    • Wear/Home/Acc’s: 3Q2019 $6.52B / 3Q2018 $4.23B, up 54%
    • iPad: 3Q2019 $4.66B / 3Q2018 $4.1B, up 14%

    1. “freedom of operating without Big Brother.”

      Oh please. Apple — and Steve Jobs in particular — has always been about providing as much of a sealed-off product as possible. The original Mac was a sealed device. The iPods were sealed devices. The iPhone has always been a sealed device. Most of the iMac line has been sealed, with the exception of adding memory. This isn’t something new.

      What some people call “freedom,” I call unnecessary complication. Yes, I’d like to be able to swap drives out when they fail, and add memory to my laptop. But never having to worry about configurations or bios settings is a trade-off I can live with.

      1. Is there a reason you think Apple shouldn’t offer users a choice?

        I recall back in the day when the Apple Power Mac 9600 offered an easy-to-open case, 12 RAM slots, 6 PCI slots, easy to upgrade CPU and GPU, and multiple drive bays. NOBODY had troubles upgrading their Macs when their needs or budgets allowed.

        Today, as we wait for Apple to deliver on a promise to return to a user-focused Mac system design, Cook has pushed nothing but sealed devices in which even battery replacement is an expensive pain in the butt requiring a visit to Apple Services.

        Padding Services revenue by making user repairs and upgrades nearly impossible or at least unaffordable is not a path many of us older Mac users appreciate.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.