As expected, Apple yesterday released the financial results for its first fiscal quarter of 2019. Revenue in the period was $ 84.3 billion (-5% compared to the same period in 2018), with net profit of $ 20 billion (-0.5%) and diluted earnings of $ 4.18 (+ 7.5%, a record). International sales comprised 62% of all quarterly sales.
As usual, the CEO Tim Cook and the CFO Luca Maestri held an audio conference to announce the results and comment a little on the company's performance in the last period and the projection for what is yet to come. In this event, whether during the speeches of the executives or in the question and answer session with analysts / journalists, they always paint interesting information. And we, of course, follow everything closely to bring you the highlights of Apple's last quarter.
This was the first fiscal quarter in which Apple stopped reporting exact figures related to sales of iPhones, iPads and Macs. What we do know is that the total revenue of the iPhone segment fell 15% compared to last year even though, during Apple's fiscal year, trade-ins have doubled compared to fiscal 2018.
Several factors explain the drop in sales of iPhones, one of which is the fact that customers stay longer with their current devices (whether due to macroeconomic factors especially in emerging markets or the fact that they gain a survival when changing the iPhone battery), as reported Cook.
If we put all the products and services offered by the company on the same cake, however, revenue rose 19%. One thing that Apple did not do but started doing, however, was to detail its profit margin, stating that for products it was 33.4% and that for services, 62.8% as the representation of products still much higher than that of services, the company's total margin for the fiscal quarter was 38%.
Speaking specifically of the ?Services? segment (one of Apple's long-term bets), it reached a new historic record of $ 10.9 billion in revenue, 19% more than in the first fiscal quarter of 2018.
Today there are 360 ??million customers paying / subscribing to iCloud (more space in the cloud) and / or Apple Music 120 million more in one year. Because of this growth, Apple remains confident in the goal of doubling the numbers from 2016 to 2020 by then, Ma expects to have more than 500 million paying users.
Apples services business generated $ 39.6 billion in the last four quarters https://t.co/X3nrpLE1Or
Thats more than: – Oracle? AmEx? Coca-Cola? Nike? 3M? Philip Morris? Kraft Heinz? Macys? Fox? Time Warner
(and about as much as Facebook) https://t.co/k9QBv7tJlW pic.twitter.com/EOLrcydZJC
– Mike Murphy (@mcwm) January 29, 2019
The Apple Services business has generated $ 39.6 billion over the past four quarters (tax) https://qz.com/1536922
This more than:
- Philip Morris
- Kraft Heinz
- Time Warner
(and almost the same as Facebook) http://fortune.com/fortune500/list/
Distinguishing Apple by region, China fell 26.7% compared to 2018; in Europe, the decline was 3.3%; in Japan, 4.5%; in the USA, however, the company grew 5%. Despite the difficulties in China, the ?Wearable, Home and Accessories? and ?Services? segments continued to be very strong there; globally, revenue from ?Vestables, Casa e Acessorios? grew by an incredible 33% (it is approaching the size of a company listed in the ranking Fortune 200) isolating only the wearables, the growth was 50%! Meanwhile, Macs grew 9% and iPads, 17%. According to Cook, more than two-thirds of Chinese customers who bought an iPad or Mac are new to the platforms.
In turn, Maestri made it clear that the problem involving the approval of new games on the Chinese App Store (which has been going on for a long time) is clearly affecting business in the country.
IPads grew by two digits in four of the five geographic segments where the company operates and the satisfaction level of the tablet reached 94% (if we analyze only the index for iPad Pro, it is 100%).
The truth is that the Apple ecosystem is quite strong. To give you an idea, today there are 1.4 billion devices connected with the Ma logo spread around the world (of these, 900 million are iPhones number also never before disclosed). The company also said that periodically commenting on its installed base in these financial events and that the installed base of the Mac broke a new record.
Due to this increase in the installed base and the expansion of the services themselves, Apple Pay was responsible for 1.8 billion transactions in the period, the German bank Deutschebank reported that it carried out more Apple Pay activations in one week than any service for Android in one year; j Apple Music reached 50 million paid subscribers; Apple News, meanwhile, now has 85 million monthly active users (a record high) and will be arriving in Canada soon (joining Australia, the United States and the United Kingdom).
Questions and answers
At the end of the conference, Apple executives make room for questions from analysts / journalists and, responding to a question from Steve Milunovich (of Wolfe Research), Maestri said that the iPhone XR remains the best-selling model today, followed by the XS Max and XS.
J Shannon Cross (from Cross Research) asked about opportunities in the video industry and Cook tried to put the cards on the table. For the executive, the behavior of the public is changing a lot, such as the break up of cable TV packages that has been discussed for some years. Apple wants to participate in this, in several ways (either with Apple TV, or with AirPlay 2 coming to several TVs from other manufacturers), in order to improve the experience in the living room.
Of course, third-party video subscriptions currently available at the store play a key role in this story, but Cook made it clear that the company is betting heavily on its own original content (signing a multi-year partnership with Oprah, for example). Cook said that it is not yet time to talk about it, but that Apple is working hard on it and that we will have news soon.
The fiscal quarter in graphs
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Looking ahead to the second fiscal quarter of 2019, Apple predicts revenue of $ 55-59 billion, gross margin between 37% and 38%, operating expenses between $ 8.5 and $ 8.6 billion, other revenues / (expenses ) of US $ 300 million and a tax rate of approximately 17%.
via MacRumors, AppleInsider, MacStories