18 Key Takeaways From Apple's First Earnings Call of 2019

[MacRumors]

Apple yesterday reported its earnings results for the first quarter of the 2019 fiscal year. Apple's CEO Tim Cook and CFO Luca Maestri then went on a conference call with analysts to discuss the results. Key takeaways are below.

Revenue of $84.3 billion. For financial details, see our earnings report coverage.

• 1.4 billion active devices at end of quarter.
• Apple Music now has over 50 million paying subscribers.
• App Store set single-day spending record: over $322 million on New Year's Day.
• 1.8 billion Apple Pay transactions in quarter, more than 2x vs. year-ago quarter.
• Target, Taco Bell, and Jack in the Box stores in U.S. will accept Apple Pay soon.
• Apple News now has over 85 million monthly active users.
• Apple News launching in Canada later this quarter. English and French.
• Apple's gross margin was 34.3% for hardware products and 62.8% for services.
• Apple remains on track to double its fiscal 2016 services revenue by 2020.
• Apple now has 360 million paid subscriptions across its services.
• Apple expects to surpass 500 million paid subscribers across its services in 2020.
• Wearables revenue driven by "amazing popularity" of Apple Watch and AirPods.
• Wearables category is "approaching the size of a Fortune 200 company."
• 506 Apple Stores across 22 regions at end of quarter.
• Apple ended the quarter with $245 billion in cash plus marketable securities.
• Apple to provide update on its capital return program in March earnings report.
• iPhone XR is best-selling iPhone model, then iPhone XS Max, then iPhone XS.

More coverage:

Apple Lowering iPhone Prices in Some International Markets to Boost Sales
Tim Cook: Apple Plans to Participate in the "Breakdown of the Cable Bundle" With AirPlay 2, Original Content, and More
Tim Cook: "I Do Think Price is a Factor" in Declining iPhone Upgrades
Tim Cook: Customers Holding on to Older iPhones "a Bit Longer" Than in Past

A replay of the conference call is available on Apple's website for a limited time.

Article Link: 18 Key Takeaways From Apple's First Earnings Call of 2019

 

[rammes]

"$245 billion in cash"

trying to understand how much that is.

 

[ryanwarsaw]

I am confused. I thought they said they had $130 billion in cash?

 

[rp2011]

Love when articles are bullet points right to the point. Business insider does that before their stories, tell you everything that’s inside the article, then if you want to dig into the weeds, keep reading/

 

[G5isAlive]

Apple is doomed. /s

 

[Carnegie]

I am confused. I thought they said they had $130 billion in cash?

That's net cash. So, in broad strokes, cash minus debt.

 

[MacFather]

Deleted.

 

[Carnegie]

What would be the price tag to take the company private?

Likely well over a trillion dollars.

I might be willing to contribute a few thousand if someone can pull the rest together.

 

[T'hain Esh Kelch]

"$245 billion in cash"

trying to understand how much that is.

About 245 million iPhones.

 

[TantalizedMind]

iPhone XR is best selling yet I haven’t seen ONE in the wild other than mine. Weird.

 

[Totally]

I love how none of the 18 takeaways are

1. iPhones are too expensive.
2. You should be concerned that nearly 2/3 apple's revenue is from iphones.

 

[Morgenland]

Congrats.
Now Apple can bring out new iMacs and the missing monitor for their Mac Mini and the missing iPhone SE2, then the hardware world is almost all right for the next 2 years. Not every year a new Porsche (iPhone), that doesn't make sense. The iPhone is not bought because of some micro-gimmicks but because it has a great operating system.

Apple, then please concentrate on improving your services (e.g. Facetime international is often still unreliable; audio/video failures).

 

[Mackinjosh]

How do you do a key takeaway article and not mention that Apple sold over 11 million few iPhones this quarter than they did in the same quarter last year?

 

[TantalizedMind]

I love how none of the 18 takeaways are

1. iPhones are too expensive.
2. You should be concerned that nearly 2/3 apple's revenue is from iphones.

I remember when Apple made computers.

 

[kahkityoong]

I love how none of the 18 takeaways are

1. iPhones are too expensive.
2. You should be concerned that nearly 2/3 apple's revenue is from iphones.

That’s because the takeaway points are based on fact rather than opinion.

 

[AngerDanger]

I love how none of the 18 takeaways are

1. iPhones are too expensive.
2. You should be concerned that nearly 2/3 apple's revenue is from iphones.

Agreed. You know, back in the day, I ran a tech company myself, and we made every effort to frame our earnings calls in the worst possible way.

The company is gone now; apparently, investors lost confidence for some reason and stocks plummeted. I can't for the life of me imagine why…

 

[nburwell]

iPhone XR is best selling yet I haven’t seen ONE in the wild other than mine. Weird.

Same here! I have only seen my sister-in-law's Xr which she got on Christmas. Other than that, I have seen not one Xr out in the wild.

 

[Sasparilla]

Their stocked popped after the earnings report, so investors must be okay with what they heard.

Same here! I have only seen my sister-in-law's Xr which she got on Christmas. Other than that, I have seen not one Xr out in the wild.

It gives one an appreciation for the vast numbers of iPhones out there. I remember one of the commenters mentioned back in Dec I think, that he / she worked at a wireless carrier store in the U.S. and the Xr was by far the best seller. Perhaps 3 months isn't enough time to push enough out there where we can see them commonly. My wife and I both have them, but I've only seen X's and (possibly Xs's since the same size) out in the wild and those are rare.

Apple's iPhone user base is truly massive.

 

[charlieroberts]

I love how none of the 18 takeaways are

1. iPhones are too expensive.
2. You should be concerned that nearly 2/3 apple's revenue is from iphones.

Well that's because the market is not saying that.

Record sales in the USA and several other markets. The biggest decline in sales is in China.
So MAYBE you could say iPhones are too expensive FOR CHINA.
But even then, its unclear if decline is only driven by price considering the weakness that other companies have reported from demand in China.

In any case, there is a more nuanced discussion to be had, unfortunately, people like to stick with simple mob chants.

Not defending iPhone pricing btw, but I don't think that price is outrageously above what it was in the past.

 

[Silver Idaten]

I’m glad the XR is doing well. I have one now and it’s great, and this year I want to upgrade to XR2 because I want the few features I’m missing out on - 4x4 and dual cameras. Only thing I’m jealous of the XS of is the OLED and the fact that Apple makes the better cases for it.

 

[Ormolu]

Luca Maestri: “We repurchased 38 million Apple shares for 8.2 billion” (from https://sixcolors.com/post/2019/01/this-is-tim-transcript-of-apples-january-29-call-with-analysts/)

Takeaway 19: Apple repurchased 38 million shares at an average price of $215.79 — pretty near the top of the market. Were they a) Trying to bolster the share price; b) Blissfully unaware of anything that might be about to make the price slide; c) Out of the market after the price slide, so that nobody could accuse them of having taken advantage?

 

[jjohnstonjr]

XR is better selling than the XS Max? I mean I can see it but I don't believe.

 

[LxHunter]

That's net cash. So, in broad strokes, cash minus debt.

 

[ChrisNH]

34% margin tells me that they have room to cut prices without anyone at Apple going hungry. But if they still want to have tables at Apple Stores made from wood gotten from some Amazon Rain Forest, they'll need to be OK with quarters like these.

 

[Goompa]

When you realize that your beloved company does not sell/care about computers anymore.