As expected, Apple yesterday released the financial results for its third fiscal quarter of 2018. The numbers were excellent and were within the company's plans: revenue for the period was $ 53.3 billion (17% more than in the same period last year), with a net profit of $ 11.5 billion (+ 32%) and diluted earnings of $ 2.34 (+ 40%). International sales comprised 60% of all quarterly sales.
Sales of iPhones grew 1%, totaling 41.3 million units and generating 20% (!) more revenue than in the same period a year ago, reaching $ 29.9 billion. Sales of iPads also grew 1%, reaching 11.6 million of units, which generated $ 4.7 billion (-5%) for the company. The Macs had a significant drop of 13% (3.7 million units sold), generating revenue of $ 5.3 billion. The category Services, in turn, generated $ 9.5 billion (an incredible growth of 31%), while the category Other products (which includes Apple Watch, Apple TV, AirPods, Beats headphones, among other things) earned significant revenue from $ 3.7 billion (a 37% growth)!
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. 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. 😉
Below, the main points cited by the executives.
General comments
- With revenue of $ 53.3 billion, Apple reached the top of its forecast for the quarter, which was between $ 51.5 billion and $ 53.5 billion.
- The revenue was a record for the company's third fiscal quarter.
- The forecast of $ 60-62 billion for the fourth fiscal quarter of 2018 is also a record.
- Apple recorded year-over-year growth across geographic segments; the company has grown in each of its 15 main markets, with a particularly strong performance in the USA, Hong Kong, Russia, the Middle East and Africa.
- Apple ended the quarter with $ 243.7 billion in cash (in addition to negotiable securities); the company's net position is $ 129.1 billion.
- Apple repurchased $ 20 billion in shares during the quarter, as part of its repurchase program; 112.8 million shares were repurchased through open market transactions during the quarter.
- This is the fourth consecutive quarter that Apple has achieved double-digit growth in Greater China.
- 4 million users are using the beta versions of iOS 12, macOS 10.14 Mojave, watchOS 5 and tvOS 12.
- More than 5,000 schools and colleges have adopted the “Everyone Can Program” program (“Everyone Can Code”) and more than 300 schools have adopted “Everyone Can Create” (“Everyone Can Create”).
iPhones
- Again, the iPhone X was the best-selling model of the quarter; since its launch, it is Apple's best-selling model.
- The average selling price (ASP, or average selling price) of the iPhone was $ 724; a year ago (in the third fiscal quarter of 2017), when the iPhone X did not yet exist, the average price was US $ 606; in the penultimate quarter, ASP stood at $ 728.
- The active installed base of the iPhone grew two digits in the quarter, due to loyal customers and customers who abandoned Android in favor of iOS.
- According to the research firm 451 Research, the iPhone user satisfaction rate is 98%.
- The iPhone has grown by two digits in several markets, including Germany, Canada, the USA, Switzerland, the Middle East, Africa and other countries / regions.
- Apple got the Top 3 best-selling phones in Urban China the iPhone X o # 1 a few quarters ago; iPhones constitute the Top 3 of five smartphones in the USA, the UK and Japan.
iPads
- Almost half of iPad purchases in the quarter were for consumers who never owned one.
- Despite stable sales, Apple's profit dropped from iPad sales, which can be explained by the success of the more affordable 9.7-inch model, pulling ASP down.
- Customer satisfaction is at 94%.
- 75% of companies planning to buy tablets will buy iPads.
Macs
- About 60% of Mac purchases in the quarter were for consumers who never owned one.
- Most of Salesforce's 35,000 employees are using Mac.
- This was the worst Mac sales quarter since 2010; which can easily be explained by the entire line, with the exception of the MacBook Pro (which was only updated after the end of the fiscal quarter), being out of date.
Services
- It was the best quarter for Services in Apple's history.
- The category grew by two digits in all geographic segments where Apple operates.
- The record $ 9.5 billion in revenue includes $ 236 million from lawsuits that Apple won.
- Apple's goal of doubling revenue from the Services category by fiscal year 2020 (starting with fiscal year 2016) is still standing, according to Cook.
- Apple now has more than 300 million subscribers who pay for some company service (Apple Music and / or space on iCloud).
- The App Store and iCloud broke a new revenue record in the quarter.
- Since the creation of the store, developers have received more than $ 100 billion in payments.
- The number of apps offering in-store subscriptions is hitting the 30,000 mark.
- Apple Music grew by more than 50% year-over-year.
- The service streaming musical now has 50 million users (paying and within the three-month trial period).
- AppleCare revenue (extended warranty for Apple products) has seen its greatest growth in the past 18 quarters.
- Cloud service revenue increased by more than 50% year on year.
- The number of articles read on Apple News more than doubled compared to the same period in 2017 (remembering that News is only available in Australia, the United States and the United Kingdom).
- Apple Pay will be launched in Germany later this year.
- Cook said Apple Pay had more transactions than Square in the fiscal quarter, yet he praised Square as "a great company."
- In the USA, Apple Pay finally lands on the CVS pharmacy chain and 7-Eleven convenience stores.
- There were 1 billion transactions using Apple Pay in the fiscal year, triple compared to the fiscal year 2017.
- Soon, iTunes will house the largest collection of Dolby Atmos films.
- Apple is seeing a lot of interest from companies in the Apple Business Chat (for example: DISH, Aramark, Four Seasons, Harry & David and American Express are adopting the service).
- Cook commented on the content production with Oprah Winfrey and the hiring of two highly respected television executives, who have been working at Apple for some time on a project he cannot comment on (aka “Apple Video”, service of streaming video from Ma to rival Netflix).
I couldn't be more excited about what's going on there. We have great talents in the area that we take in different places and we feel very good about what we will eventually offer. In terms of the main catalyst for change, the cable cut is likely to continue accelerating and probably at a higher rate than many expect.
We expect dramatic changes in the content industry. We are happy to be working on something, we are just not ready to talk about it today.
- The number of active users on FaceTime and iMessage also broke a record, with good growth acceleration.
- During fiscal 2018, Siri has been requested 100 billion times.
Other products
- Cook said that AirPods remind him of the early days of the iPod, when he saw white headphones everywhere.
- Revenue from wearables (Apple Watches, AirPods and Beats headphones) has exceeded $ 10 billion in the past four quarters; in a year-over-year comparison, growth was 60%.
- The Apple Watch had a record quarter, with growth in the range of 40%!
- Charter Communications (an American telecommunications company that provides cable television, high-speed Internet and telephony services to more than 5 million customers in 29 states) will begin offering Apple TV 4K to its customers in nearly 50 million homes.
- Believe me: AirPods continue to sell at the same pace that Apple produces them.
Stores
- There were more than 250 thousand sessions Today at Apple in the quarter.
- Apple opened its 50 retail store in Greater China during the quarter and a new store in Milo, Italy.
Graphics
Below are some figures that summarize Apple's fiscal quarter:
Project for FQ4 2018
For the fourth fiscal quarter of 2018, Apple predicts revenue between $ 60 and $ 62 billion (up from $ 52.6 billion last year), gross margin between 38% and 38.5%, operating expenses between $ 7.95 and $ 8.05 billion, other income / (expenses) of $ 300 million and a tax rate of approximately 15%.
via MacRumors, AppleInsider, MacStories
