Yesterday, May 2, Apple released the financial results of its fiscal second quarter 2017!
As we reported, the company's revenue was $ 52.9 billion (+ 4.7%), net profit of $ 11 billion (+ 4.7%) and earnings per share diluted by $ 2.10 (+10 , 5%). The sales figures for iPhones, iPads and Macs stood at 50.8 million (-1%), 9 million (-13%) and 4.2 million units (+ 4%), respectively. The company's Services (which include iCloud, Apple Music, Apple Pay, App Store and others) had an 18% increase in revenues, totaling US $ 7 billion; the Others category (Apple Watch, Apple TV, AirPods, Beats headphones and other products) had an incredible increase of 31%, with gains of US $ 2.9 billion.
As always, Tim Cook (CEO) and Luca Maestri (CFO) participated in an audio conference to explain and talk a little more about the details of these last three financial months of Ma. Below, you can see all the highlights!
- In Greater China, the Macs and Services division grew in revenue by two digits in the quarter;
- Retail stores across the country also did well, with a 27% increase in revenue in a store-by-store comparison, revenues rose 7%;
- During the first two quarters of fiscal year 2017, Apple's numbers improved significantly in China compared to the last two quarters; first half revenue, however, fell 13% year-over-year, about a third of which was due to currency fluctuation;
- In the second quarter of last year, the drop was 32%; the results now are within the company's expectations and similar to the year-over-year performance of the December quarter; Apple remains excited about opportunities in China;
- Apple's revenue in India grew by two digits; Apple continues to reinforce its local presence in the country, which has a huge, young and technology-savvy population; the economy over there is also growing at an accelerated rate, as well as improvements in infrastructure on the 4G networks (which opens up opportunities for the iPhone);
- Apple also grew two digits in Germany, Australia, Canada, the USA, the Netherlands, Mexico and Turkey;
- At the Brazil, in Korea, Scandinavia, Central / Eastern Europe, the Middle East and Thailand, growth was well over 20%;
- The company has already used $ 211.2 billion from the Capital Return Program (initially prayed at $ 250 billion), including $ 151 billion in share repurchases;
- Apple again increased its dividend payment the fifth increase in less than five years;
- The Stock Buyback Program has also been updated by an additional $ 50 billion, now totaling $ 300 billion; for this, the deadline was extended until March 2019;
- 96% of the electricity used in Apple's global facilities came from renewable energy sources, reducing carbon emissions by almost 585,000 metric tons; Apple now 100% green in 24 countries, including all data centers;
- Citing Apple Park as an investment in the U.S., Cook said that many others have turned; through its products and the company's business success, Apple now supports 2 million jobs in all 50 states;
- In the last fiscal year, the company spent more than $ 50 billion in the United States with American suppliers, developers and partners;
- The company's profit margin was 38.9% against 38.5% last quarter;
- Apple set a new business revenue record for the quarter, while partnerships with SAP, Cisco, IBM continue to bear fruit;
- Apple ended the quarter with $ 256.8 billion in cash plus negotiable securities, a sequential increase of $ 10.8 billion; of these, 93% (or $ 239.6 billion) are outside the US.
- IPhone sales were as expected by the company;
- The active installed base of iPhone users grew two digits year-over-year;
- According to data from the firm IDC, Apple gained market share in almost all countries where it operates during the quarter;
- The demand for the ?new? iPhone (PRODUCT) RED Special Edition is very good;
- The iPhone market has grown quite strongly in four of Apple's five operating segments, with particularly strong results in Western Europe, the Middle East and the rest of the Asia-Pacific segment in all of these areas iPhone sales have gone up by two digits;
- The average selling price of the iPhone rose from $ 642 (a year ago) to $ 655, thanks to the good sales figures of the Plus models;
- According to 451 Research, user satisfaction rates for iPhone 7 and iPhone 7 Plus are respectively 96% and 98%; among corporate consumers, it stands at 95%;
- Among those who are planning to purchase a smartphone in the current fiscal quarter, 79% plan to purchase an iPhone;
- Volkswagen recently selected the iPhone as its standard smartphone; thus, 620,000 company employees around the world will now use the Apple device;
- Capital One has trained its associates with Macs and Apple Watches, and created more than 40 native iOS apps that now run on nearly 30,000 iPhones and iPads.
- The response to the new iPad (fifth generation) has been very good, according to Cook;
- Incredible as it may seem, Maestri stated that the iPads' result exceeded the company's expectations;
- Apple gained participation in several important markets, including the USA, Japan and Australia;
- Revenue from the iPad division has also grown over the past four quarters;
- The iPad remains the most popular tablet in the world and the primary computing device for millions of customers across the globe;
- According to the NPD, the iPad has 81% of the tablet market share above $ 200 (the market in which it competes);
- According to 451 Research, the 9.7 ? and 12.9 ? iPad user satisfaction index in the quarter was 95% and 100%, respectively; among American users who are planning to purchase a new tablet in the next six months, 69% intend to buy an iPad; satisfaction among corporate users was 96%, while the percentage of corporate users wishing to purchase a new tablet from Ma was 68%.
- With 14% growth in revenue, the Macs division broke a new record for the company's second fiscal quarter; meanwhile, overall PC sales have remained stable, with no growth (according to IDC figures);
- Apple won market share thanks to the good reception of the new MacBooks Pro; incidentally, thanks to the good sales of MBPs, Apple saw a 10% growth in its notebook segment while the market as a whole grew by 5%;
- In the past four fiscal quarters (ie, a fiscal year), the Macs division has raised $ 25 billion in revenue;
- Continuing his ?empty? speech about the future of the line, Cook mentioned that Apple is aggressively investing in the future of the Mac and that it is very excited about the innovation it can bring to the platform.
- With a revenue of US $ 7 billion, the ?Services? category is moving to match a company listed on the Fortune 100;
- Maestri commented that Apple wants to double revenue from the ?Services? division by 2020;
- In a year-over-year comparison, the App Store grew an incredible 40%, reaching a new record; the average amount spent per user has also increased, according to the company, as has the number of paying accounts;
- According to App Annie figures, the App Store generated twice as much revenue from Google Play in the fiscal quarter;
- The number of developers selling apps in the store grew by 26% compared to a year ago;
- Apple saw double-digit revenue growth with Apple Music subscriptions and iCloud storage plans;
- The number of users with some type of subscription to Apple's services (Apple Music and iCloud storage, for example) stands at 165 million;
- Apple Pay is now available in 15 countries; there are more than 20 million merchants accepting Apple's payment service, with 4.5 million in the US alone; the transaction volume has increased by 450% in the last 12 months;
- In the United Kingdom, for example, acceptance points grew by 44% in one year, while Apple Pay's monthly transactions grew by almost 300%; in Japan, more than half a million users are conducting 20 million monthly transactions;
- As for iMessage, Cook shared an interesting fact: during the Super Bowl in February, users sent 380,000 messages per second, more than double the same period in 2016.
- With the opening of the Apple Dubai Mall, the company now has 495 stores spread across 18 countries (Hong Kong and Macau, as we know, are part of the People's Republic of China);
- Dubai's second store, incidentally, was described by Cook as a truly international one, as employees speak a total of 45 languages;
- Apple stores (physical and online) grew in virtually all regions, reaching 18% global growth; the number of visitors increased by 16% compared to last year.
- Apple Watch sales nearly doubled from 2016 to 2017;
- The Apple Watch is the most loved and best-selling smartwatch in the world, and Apple never tires of hearing wonderful stories from customers who have somehow been impacted by capabilities fitness and health of the watch;
- As we reported, AirPods have an incredible satisfaction rate, around 98%;
- Demand for AirPods continues to exceed supply and the growth of Beats products has also been very strong;
- If combined, Apple Watch, AirPods and Beats products (products that Apple considers and categorizes as ?wearable?), revenues in the last four quarters reach the size of a company Fortune 500;
Questions and answers
- Katy Huberty (of Morgan Stanley) asked if Apple had something in the launch of the iPhone 7 and the intense demand for the Plus model, which has been missing for a long time in the market; Cook replied that in fact the demand for the bigger model was much stronger than expected, and that it took a while for everything to be balanced at the beginning of the year and that Apple always learns from these releases;
- Asked about Apple's performance in China, Cook commented that seven of the ten most visited Apple stores in the world are in the country;
- J on the market for wearablesSteve Milanovich (from UBS) asked Cook to comment a little on the opportunity in this market; Cook then said that the Apple Watch is strategic for Apple, and the company had known it since before launching it; product sales doubled in six of the ten most important markets;
- Asked about a 451 Research survey that commented on the decline in the iPhone's retention rate, Cook commented that he is seeing what he believes is a pause in iPhone purchases due to the increasingly frequent rumors about future devices;
- On the issue involving Qualcomm's payment withholding, Cook said:
You cannot pay something when there is a dispute about the amount. You don't know how much to pay. And then, you know, they think we owe an amount and we think we owe a different amount. And there was not a meeting of heads there, and so, at this point, we need the courts to decide that. Unless we are able to, over time, resolve this between us by deciding the amount. But now, we are depending on the courts to do that. As soon as the thought. The reason why we are pursuing this is that Qualcomm is trying to charge Apple a percentage of the total value of the iPhone, and they do a great deal of work around essential patents.
But a small part of that an iPhone. It has nothing to do with the screen or the Touch ID or a lot of other innovations that Apple has done. And so we don't think that's right. We are taking a principled position with them and we strongly believe that we are right. I'm sure they believe they are. that's why the courts exist and we're going to let them settle that.
- Regarding sales and upgrades of iPhones, Cook mentioned that, in this first fiscal semester of Apple, the company witnessed the highest absolute number of upgrades ever seen the highest absolute number of migration (Android to iOS) outside of Greater China.
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Forecasts for the next quarter
For the third fiscal quarter of 2017, Apple expects revenue between $ 43.5 and $ 45.5 billion, a gross margin between 37.5% and 38.5%, operating expenses between $ 6.6 and $ 6, 7 billion, other income / (expenses) of $ 450 million and a tax rate of 25.5%.
(via iMore, MacRumors, MacStories)