24 hours ago, Apple released the financial results for its fourth fiscal quarter of 2017 and, if someone thought that the chosen date would be a way of not attracting much attention to possible disappointing numbers (since we are talking about the eve of the most important launch of the year for Ma), it can be considered properly cheated or cheated. The period was excellent for the company.
Just yesterday, we already reported that Apple earned, in the period, a revenue of $ 52.6 billion (12% growth year-over-year), profit from $ 10.7 billion (+ 18.6%) and still had the diluted earnings in $ 2.07 (+ 24%).
Sales of iPhones, iPads and Macs all saw solid growth, with 46.7 million units (+ 3%), 10.3 million units (+ 11%) and 5.4 million units (+ 10%), respectively. In turn, the Services brought in revenues of US $ 8.5 billion (+ 34%) and the Others category, which includes Apple Watch, Apple TV, AirPods, Beats headphones and accessories, provided revenues of US $ 3.2 billion (+ 36%).
The table below shows all numbers more organized:
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. Below, we check the main highlights mentioned by the executives.
- According to Tim Cook, this was the biggest year in Apple's history: the company had record sales in the United States, Western, Central and Eastern Europe, Japan, South Korea, Asia, the Middle East and Africa;
- All product categories experienced revenue growth;
- The company was able to resume growth in China, with the iPhone, iPad and Mac gaining a larger share in their respective markets;
- Emerging market revenue, excluding China, grew 40%;
- The educational and corporate markets also showed excellent results, with growth of two digits on a global scale;
- Apple ended the fourth fiscal quarter with $ 268.9 billion in cash, an increase of $ 7.4 billion over the previous quarter;
- Of this money, $ 252.3 billion (94%) is outside the United States;
- During the period, Apple returned $ 11 billion to investors, paid $ 3.3 billion in dividends and equivalents, and spent $ 4.5 billion to repurchase 29.1 million of its shares.
- The most popular model in the period was the iPhone 7, while the 7 Plus saw its sales increase significantly over the year;
- In ten years of life, Apple sold 1.2 billion (!) Of iPhones;
- The iPhones 8 and 8 Plus, in just a few weeks of life, became the company's most popular smartphones;
- The iPhone gained space in emerging markets, such as China, the Middle East, India and Mexico, but it has also advanced in several consolidated markets, such as Canada, Germany, France, Italy and Singapore;
- According to research cited by Luca Maestri, the iPhone has a 97% satisfaction rate, overall;
- Among consumers planning to buy a smartphone in the next 90 days, 69% of them intend to buy an iPhone more than five times the nearest competitive rate;
- The loyalty rate (that is, customers who remain with the brand even after changing handsets) of iPhone owners is 95%, against 53% for second place;
- In the corporate market, iPhone users' satisfaction reached 95%, and 80% of future smartphone buyers plan to choose a model from Ma.
- This was the second consecutive period with an increase of two digits for the Apple tablet line;
- According to Cook, the response of consumers to the new iPads was phenomenal, especially with the arrival of iOS 11, which gave a series of new possibilities to the devices;
- The iPad has grown in all geographic segments in which Apple operates, with particularly notable jumps in China (with a 25% growth year-over-year) and in India (39%);
- Ma's tablet line holds 54% of the US market, a good rise from the 47% it held in the same period last year;
- According to Maestri, the satisfaction rate of iPad owners is unmatched in the market, reaching 97%;
- The rate of intent to purchase an iPad among consumers and members of the corporate market wanting to buy a tablet in the near future is 70%.
- The Apple computer line had its best year in history, with the highest revenue ever generated for the company;
- The last fiscal quarter of 2017 was also the best sales period ever recorded for Macs;
- In China, things are also going very well, thanks: according to Cook, it was the best fiscal quarter for Apple computers over there;
- According to Maestri, citing studies from IDC, the Mac gained a considerable share of the computer market, which has shrunk 1% over the past year;
- Each of Apple's geographic segments has seen Mac revenue grow by more than 20%;
- In the year-over-year comparison, Mac educational purchases were two-digit in all geographic segments, too;
- In the corporate market, Macs also beat all sales records in fiscal year 2017.
Other products (Apple Watch, Apple TV, AirPods, Beats headphones, etc.)
- Apple Watch had sales growth of more than 50% for the third consecutive quarter, maintaining its undisputed leadership position in the smartwatch market;
- Apple's clothing business (which includes Apple Watch and AirPods) grew 75% in the fourth fiscal quarter of 2017, year-over-year, and has already generated the equivalent revenue for a listed company this year Fortune 400.
Services (App Store, Apple Music, Apple Pay, iCloud, etc.)
- As has been happening basically in all quarters, the Services segment, once again, broke all records in terms of revenue and profit;
- Last year, Apple set a goal of doubling, by 2020, the $ 24 billion in revenue from its services in 2016. The target is already on track to be met this year;
- Only Ma's Services sector is already the size of a company on the list Fortune 100;
- The App Store, by itself, also broke all sales, revenue and profit records ever recorded by Apple;
- According to data from App Annie, Ma's app store continues to be No. 1 in the world in terms of profit, with ease it gets almost double the number obtained by Google Play;
- On Apple Music, the conversion rate (that is, users leaving other streaming for Ma's option) greater than ever;
- The number of paid subscribers to the service grew by 75% compared to the same period last year;
- ICloud saw double-digit growth in both revenue and the average number of monthly users;
- Apple Pay continues to expand at a healthy pace, with Denmark, Finland, Sweden and the United Arab Emirates only arriving in the last month;
- The number of active payment system users has doubled over the past year, and annual transactions have risen an interesting 330%;
- In the US, 70% of major grocery stores, grocery stores and supermarkets already accept Apple Pay.
- The last quarter was very strong for Ma stores, which received 418 million visitors in the period;
- Traffic was particularly high during the weeks when the company launched new products 19% higher than the same periods in the previous year;
- Stores around the world have conducted more than 200,000 program sessions ?Today at Apple?.
- In the field of machine learning, iOS 11 is already allowing developers to integrate their applications with technology through the CoreML API. Some examples already in use are Pinterest, Padmapper and Visual DX;
- The App Store already has more than 1,000 apps that take advantage of the possibilities of ARKit, and the trend that the number grows exponentially in the coming months;
- Apple is expanding the free curriculum App Development with Swift to more than 30 technical schools around the USA;
- General Electric is placing the iPhone and iPad as standard devices for its entire workforce, comprised of more than 330,000 employees around the world, and developing iOS apps for both them and the general public.
Questions and answers
When asked about the demand for the iPhone X, Cook said that the production of the device grows week by week and will try to offer the devices to all interested consumers. The executive did not, however, state a date for the pace of production to match demand for the smartphone, and said that there is no way to know for sure what the public demand will be until a little after the first weeks of the launch.
On the possibilities of augmented reality and the next applications of technology that we will see in Apple products, Cook said that the most interesting part is to see the differences in the approach with the resource according to the country. Overall, he thinks that technology will change the shopping experience, in addition to greatly affecting games and entertainment platforms, as well as productivity applications. For the executive, this is a new opportunity as was the launch of the App Store in 2008.
When asked which of the services were pulling the most considerable increase in revenue from this segment, Maestri cited three: the App Store, Apple Music and iCloud.
Cook, when asked what his expectations are regarding the distribution of sales among the three new iPhones, said he could not speak specifically about this division. The executive, however, commented:
We never had three products at the same time and today is the first day that consumers can kind of look at all three before deciding on one. Then we'll see what happens. But in terms of price elasticity, it is important to remember that a large number of people pay for the smartphone monthly. So if you are looking in the United States, which tends to be the focus of this conference, you can buy an iPhone X for $ 33 a month. If you think about it, that's a few coffees a week less than a coffee a day, you know, in these fancy places. () We are not trying to charge the highest price we can or something, we are simply putting a price on what we are delivering.
On India, a market where Apple does not yet have a large penetration, Cook said that the company is making good progress in the country building channels, market, a favorable ecosystem for developers and even making the iPhone SE from there. Despite this, there is still a long way to go, and the executive is excited to follow it.
Forecasts for the first fiscal quarter of 2018
For the next fiscal period, Apple expects revenue between $ 84-87 billion, with a gross margin between 38% and 38.5%. Operating expenses are expected to be between $ 7.65-7.75 billion, with other expenses coming in close to $ 600 million. The tax rate should remain at 25.5%.
Here is Apple's fourth fiscal quarter of 2017 in graphs:
· ? ·
· ? ·
· ? ·
· ? ·
· ? ·
· ? ·
· ? ·
· ? ·