Wednesday, May 1st 2019

Apple Reports Second Quarter Results: Services Revenues Reach $11.5 Billion

Apple today announced financial results for its fiscal 2019 second quarter ended March 30, 2019. The Company posted quarterly revenue of $58 billion, a decline of 5 percent from the year-ago quarter, and quarterly earnings per diluted share of $2.46, down 10 percent. International sales accounted for 61 percent of the quarter's revenue.

"Our March quarter results show the continued strength of our installed base of over 1.4 billion active devices, as we set an all-time record for Services, and the strong momentum of our Wearables, Home and Accessories category, which set a new March quarter record," said Tim Cook, Apple's CEO. "We delivered our strongest iPad growth in six years, and we are as excited as ever about our pipeline of innovative hardware, software and services. We're looking forward to sharing more with developers and customers at Apple's 30th annual Worldwide Developers Conference in June."
"We generated operating cash flow of $11.2 billion in the March quarter and continued to make significant investments in all areas of our business," said Luca Maestri, Apple's CFO. "We also returned over $27 billion to shareholders through share repurchases and dividends. Given our confidence in Apple's future and the value we see in our stock, our Board has authorized an additional $75 billion for share repurchases. We are also raising our quarterly dividend for the seventh time in less than seven years."

Reflecting the approved increase, Apple's board of directors has declared a cash dividend of $0.77 per share of the Company's common stock, an increase of 5 percent. The dividend is payable on May 16, 2019 to shareholders of record as of the close of business on May 13, 2019.

The management team and the Board will continue to review each element of the capital return program regularly and plan to provide an update on the program on an annual basis.

Apple is providing the following guidance for its fiscal 2019 third quarter:
  • revenue between $52.5 billion and $54.5 billion
  • gross margin between 37 percent and 38 percent
  • operating expenses between $8.7 billion and $8.8 billion
  • other income/(expense) of $250 million
  • tax rate of approximately 16.5 percent
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18 Comments on Apple Reports Second Quarter Results: Services Revenues Reach $11.5 Billion

#1
TheDeeGee
Not that hard when you sell $300 phones for $1000.
Posted on Reply
#2
chaosmassive
that alot of money by selling overpriced junk with glorified marketing
I hope that greedy CEO can choke on that money
Posted on Reply
#3
tigger
I'm the only one
Down 5% i'm sure there'll be tears........................................not
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#4
kastriot
It's not Apple fault, people had made their "choice" and bought apple products and they had money for it.
Posted on Reply
#5
medi01
TheDeeGee, post: 4039822, member: 108032"
Not that hard when you sell $300 phones for $1000.
From BBC news: "iphone sales drop sharply".
That somehow dind't make it to TPU.
Posted on Reply
#6
Shihabyooo
TheDeeGee, post: 4039822, member: 108032"
Not that hard when you sell $300 phones for $1000.
You pay a lot more than hardware's cost for a phone these days, your identity and very soul, for example.
Posted on Reply
#7
Chrispy_
medi01, post: 4039918, member: 158537"
From BBC news: "iphone sales drop sharply".
That somehow dind't make it to TPU.
It's a different way of reporting the same thing:
"Number of iPhones sold dropped sharply, but average cost of each iPhone was much higher."

In other words, the wealthy people are spending more on each iPhone than ever before, but Apple are selling fewer phones to the mass market and losing market share. Hypothetically, if markup on iPhones has doubled, they're not even selling half as many as before, because that would break even and they haven't achieved that, they're 5% short of that.

Tim cook ought to be worried when the market is still growing at a huge rate yet apple can't even sell as many units as previous quarters/years when the market was smaller. Selling more profitable phones will fail catastrophically as a business model at some point because the rich idiot market gets smaller the more overpriced the status-symbol phones become. At some point, even wealthy people will question why they need to spend $5000 on a phone when the latest Pixel/Galaxy is superior for 1/8th the cost, with unique/innovative new things that Apple simply isn't offering.

Also, as the number of actual iPhone users shrinks, app developers without the resources to publish to both platforms will choose the one with 90%+ of the global user market. This will accelerate the rate at which other developers jump ship until eventually Android has the best apps first, more apps than Apple, and the iOS ecosystem becomes a second-rate market that makes selling $5000 iPhone XVII's an impossible proposition.
Posted on Reply
#8
R0H1T
Chrispy_, post: 4040090, member: 185623"
Tim cook ought to be worried when the market is still growing at a huge rate when he can't actually sell as many units as previous quarters/years.
Smartphone market is contracting since late 2017/early 2018 IIRC, shipments are down globally especially in saturated markets like US or even China.
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#9
bobbyrooney
Besides investors, I'm curious if anyone even really cares about apple's or any other company's financial reporting on a hardware news and reviews site. must be a slow news day.
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#10
TheGuruStud
bobbyrooney, post: 4040153, member: 172694"
Besides investors, I'm curious if anyone even really cares about apple's or any other company's financial reporting on a hardware news and reviews site. must be a slow news day.
I'm still waiting for the Intel 5g modem fiasco article. Wait, I missed it? Lol
Must've been a lot of fluff around it.

I want a list of every idiot buying music from apple. It would be better if pirated.
Posted on Reply
#11
timta2
bobbyrooney, post: 4040153, member: 172694"
Besides investors, I'm curious if anyone even really cares about apple's or any other company's financial reporting on a hardware news and reviews site. must be a slow news day.
You've been a user here long enough to know that financial reports from the big tech companies have historically been reported here. It's important to us and if it doesn't interest you, just move on.
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#12
gaximodo
Down 5% today down 50% next year. *hooray*
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#13
ironcerealbox
Effective tax rate and gross margins are ridiculous. Wow.
Posted on Reply
#14
Easo
ironcerealbox, post: 4040236, member: 157944"
Effective tax rate and gross margins are ridiculous. Wow.
Yeah, less than what the average mortal pays...
Posted on Reply
#15
64K
bobbyrooney, post: 4040153, member: 172694"
Besides investors, I'm curious if anyone even really cares about apple's or any other company's financial reporting on a hardware news and reviews site. must be a slow news day.
It's all related. For me it helps to fill in the "why ?" is a company doing the things they are. For example I'm sure you've seen it posted thousands of times over the past 10 years as to why AMD doesn't compete better with Intel on CPUs and compete better with Nvidia on GPUs at the same time. Looking at the financials answers that question to a large degree.

I'm sure it's frustrating for some to see AMD finally doing so well competing on the CPU side with Ryzen but they are doing it at the cost of letting their GPU business stagnate somewhat (as far as efficiency).

Nevertheless it was a smart business decision by Lisa Su. The financials bear that out. Back when they were more focused on their GPU business and letting their CPU business stagnate somewhat they were losing hundreds of millions of dollars a year even with all 3 console contracts. Now that they've been focused more on their CPU business for the last few years they are posting profits.
Posted on Reply
#16
Vayra86
64K, post: 4040362, member: 148270"
It's all related. For me it helps to fill in the "why ?" is a company doing the things they are. For example I'm sure you've seen it posted thousands of times over the past 10 years as to why AMD doesn't compete better with Intel on CPUs and compete better with Nvidia on GPUs at the same time. Looking at the financials answers that question to a large degree.

I'm sure it's frustrating for some to see AMD finally doing so well competing on the CPU side with Ryzen but they are doing it at the cost of letting their GPU business stagnate somewhat (as far as efficiency).

Nevertheless it was a smart business decision by Lisa Su. The financials bear that out. Back when they were more focused on their GPU business and letting their CPU business stagnate somewhat they were losing hundreds of millions of dollars a year even with all 3 console contracts. Now that they've been focused more on their CPU business for the last few years they are posting profits.
For Apple, I think a lot is down to them becoming 'more normal' as a brand and that means they have to compete more actively on actual product features.

You already see it with their phones. Hardware wise they've made some serious jumps forward up to and including their very own CPU that is pretty fast. Apple phones used be second rate hardware mostly. They're also offering a range of models now. They've dropped many of the rigid design philosophies Jobs was so serious about.

Meanwhile, there is a core of Apple fans that happily tags along for the ride and accepts those changes because they don't know any better anyway. But that number of fans has dwindled, for sure. An Iphone nowadays is not the simple choice for many as it used to be.

There is also the matter of price and the stagnation of development in phones. Prices have soared to incredible heights, but even a midrange phone is more than decent nowadays and remains useful for much longer than it used to. That mid range is not where Apple shines or wants to be. This is a self fulfilling prophecy that we can see unfold right now. They're fast becoming more exclusive again, there is just no real merit behind it anymore (if there ever was beyond the first 3 Iphone versions).

IMHO its about damn time, but Android also isn't really ideal; in that sense Apple still has some USPs for privacy.
Posted on Reply
#17
R-T-B
Shihabyooo, post: 4040082, member: 91709"
You pay a lot more than hardware's cost for a phone these days, your identity and very soul, for example.
I avois that where possible. LineageOS and Gentoo help me.
Posted on Reply
#18
R0H1T
Vayra86, post: 4040575, member: 152404"
Apple phones used be second rate hardware mostly.
Probably true at QC peak, since then Apple has consistently been the best ARM chipmaker. In fact their Ax flagship from last year beats the nearest competitor this year in ST & many MT tests, hands down. You could argue though that you pay egregiously more for that performance, but it's also true everywhere else - cars, CPU, GPU et al - where even the last 1% could fetch a premium of 100% in terms of cost for the end user.
Vayra86, post: 4040575, member: 152404"
Meanwhile, there is a core of Apple fans that happily tags along for the ride and accepts those changes because they don't know any better anyway. But that number of fans has dwindled, for sure. An Iphone nowadays is not the simple choice for many as it used to be.
Kinda of a double edged sword that, the likes of OPPO, Vivo even OnePlus are now charging a major premium for many of their mid range phones while Huawei is nearly as expensive as Samsung in lots of places. The Chinese phone makers are beating the top 2 in terms of market share & profitability, by being "premium" in the mid range ~ their biggest selling point's usually (selfie) camera!
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