Apple Reports 1Q 2019 Results: Nearly $20B Profit on $84.3B Revenue, Second-Best Quarter Ever Despite Earnings Warning

[Wanted797]

Excellent quarter?! Hardly the proper definition for a company that lost a third of its value in a couple of months. Apple is now worth less than Amazon, Alphabet, and Microsoft by tens of billions of dollars. That's not a pretty sight for loyal Apple investors. What you consider excellent and what Wall Street considers excellent is quite a huge gap. Plenty of analysts have downgraded Apple to Hold because they know in their hearts Apple is in the toilet and that the iPhone business is being ruined by cheap Android smartphones made in China. Apple seems to be unaware the iPhone is being ripped to shreds by tech-heads who believe Android smartphones costing half the price of iPhones are better for consumers. Apple is the most poorly valued major tech stock by quite a margin and everyone knows this except Tim Cook.

Apple being doomed isn't a theory. It's a quarterly fact how investors never know how far Apple is going to fall. Apple investors can never say for certain Apple stock is going up after earnings. Earnings is a crap shoot for investors. It's just as likely Apple is doomed as not doomed. You watch as analysts tear this earnings report apart and arrive at the conclusion that next quarter will bring even more pain for Apple shareholders which means Apple is doomed next quarter, for sure. Analysts will say iPhone sales will be even worse next quarter and if that isn't giving Apple the kiss of doom, then nothing is.

Excellent isn't the right term to describe Apple's quarter. Questionable would be much better a term.

You do understand how stock price works don't you?
Stock price does NOT represent how the company is doing financially AT ALL.

The stock markets are based on supply and demand and where people want to buy Apple stock. Analysts simply try to predict how the market is going to react to news and earning reports from Apple, but they can never know for sure.

A company could have record growth and make record figures, but if along side a massive screw up by the company like a data breach, privacy issue, leaked document etc. The stock price can tank simply because investors want to boycott the company.

The stock price represents how many people want to buy shares. Not how well Apple is doing.

 

[citysnaps]

Cook still banging on about subsidies and battery replacements as reason for fewer upgrades.

Well...with 11 million people who took advantage of Apple's $29 battery replacement in 2018, many of those are people who didn't upgrade.

 

[nvmls]

Go get 'em Timmy!

 

[BuddyTronic]

Calculating a monthly cost in order to justify the price is a bit deceptive. Consider that $5000 iMac Pro is "only" $3.47 a day for 4 years. That's like a coffee a day! But in reality, a $5000 computer is very expensive. You could break down the lease of a Mercedes as "only" $16.66 a day. But many people make $10 an hour.

I think the point he was making is that you spend $1000 per year on cellphone service, so why care so much if the phone also costs $1000

 

[dgdosen]

This strikes me as fishy - Apple missed their sales forecasts changes by a billion dollars from a date of just a month ago and a date after their books were already closed for the quarter! It's like Tim found another million iphone unit sales in the couch cushions after the end of the quarter.

This makes me think Tim did some window dressing on the numbers after he got some negative publicity and a swift kick in the stock valuation last month. It's making the stock price more volatile, and I don't think that's a sign of good management.
[doublepost=1548813579][/doublepost]

You do understand how stock price works don't you?
Stock price does NOT represent how the company is doing financially AT ALL.

The stock markets are based on supply and demand and where people want to buy Apple stock. Analysts simply try to predict how the market is going to react to news and earning reports from Apple, but they can never know for sure.

A company could have record growth and make record figures, but if along side a massive screw up by the company like a data breach, privacy issue, leaked document etc. The stock price can tank simply because investors want to boycott the company.

The stock price represents how many people want to buy shares. Not how well Apple is doing.

Actually the stock price should represent the discounted cash flow of the value of a share of Apple. The biggest impact on those shares will be the both the quantitive effect of decisions and earning today - and to a lesser extent - forecasts on those same things looking into the future.

 

[Plutonius]

Only 9% of it is computers now .

I can see why it looks like Apple is putting little effort into it's computers (especially the MacBook Pro).

No need to fix the T2 issues, the keyboards, flexgate, etc. since computers are such a small portion of the company.

 

[Abazigal]

They dont give numbers do they so cant say for sure but likely they sold more iPads but Macs will account for a greater portion of revenue on smaller unit sales. That was certainly the case in Q4 2018, iirc they made nearly double the revenue on half the units sold for Macs v iPad

Yet people on here will still tell you Apple shouldn't care about it at all and the iPad is the future.
[doublepost=1548808137][/doublepost]


See above. Funny thing is if they put as much effort into the Mac as they do the iPad it would probably be a significantly bigger business for them.

Apple isn’t enthusiastic about the Mac because it doesn’t represent the future of product design, which is to make technology more personal.

Look at the ipad. It runs the same OS as their most popular product - the iphone. It taps on the same infrastructure (iOS App Store, Apple Music), shares a similar design language, even uses largely the same tech (rear cameras, Face ID, processors). It’s so much easier to redesign the ipad once you are done with the iPhone compared to a Mac, which shares so little synergy with the rest of the Apple ecosystem.

And you don’t any more personal than the Apple Watch and the airpods, which you are basically wearing on you all day (or at least for multiple hours at a stretch).

The Mac might currently be earning more than the iPad, but it’s clear that when it comes to designing a new Mac, Apple’s heart just isn’t in it.

Should Apple keep every product in their lineup constantly refreshed? Sure. Will they? You all know the answer to that as well as I do.

 

[Michael Scrip]

I think the point he was making is that you spend $1000 per year on cellphone service, so why care so much if the phone also costs $1000

Thank you... that's exactly what I was trying to say.

 

[triton100]

I predicted this when US carriers got rid of phone subsidies. So many people honestly thought iPhones were only $200 and happily upgraded every two years. There is just no reason anymore for most people to upgrade that frequently, especially at the prices these devices are selling for.

Surely people weren’t that stupid. You simply add the cost of the phone 200$ to the total of all the monthly spread out carrier payments for the total cost. Plus it always works out cheaper to buy the phone separately without a carrier anyway and tag on the cellphone bill separately.

 

[donaldK]

Apple today announced financial results for its first fiscal quarter of 2019, which corresponds to the fourth calendar quarter of 2018.

For the quarter, Apple posted revenue of $84.31 billion and net quarterly profit of $19.965 billion, or $4.18 per diluted share, compared to revenue of $88.3 billion and net quarterly profit of $20.1 billion, or $3.89 per diluted share, in the year-ago quarter.

The earnings report comes after Apple issued a rare warning on January 2 that revenue for the quarter would come in at least $5 billion below the company's original guidance, with Apple pointing to a number of factors including the later launch of the iPhone XR, general weakness in China, and fewer upgrades as customers took advantage of Apple's reduced pricing on battery replacements in 2018 to extend the lives of their current phones.

Even with the earnings warning, the quarter was the second-best in Apple's history in terms of revenue and profit, trailing only the first fiscal quarter of 2018.

Gross margin for the quarter was 38.0 percent, compared to 38.4 percent in the year-ago quarter, with international sales accounting for 62 percent of revenue. Apple also declared an upcoming dividend payment of $0.73 per share, payable February 14 to shareholders of record as of February 11.

This quarter also marks a change in the way Apple reports its results, as the company is no longer providing unit sales data for iPhone, iPad, and Mac. Apple argues that quarterly unit sales are not an accurate indicator of the underlying strength of Apple's business, but critics have suggested the move is an attempt to make it less obvious that Apple is making up for sagging unit sales by selling more expensive devices.Apple's guidance for the second quarter of fiscal 2019 includes expected revenue of $55-59 billion and gross margin between 37 and 38 percent. That revenue figure is near or slightly below analysts' expectation of around $59 billion. Apple's stock is currently up about 2.5 percent in after-hours trading following the release.

Apple will provide live streaming of its fiscal Q1 2019 financial results conference call at 2:00 PM Pacific, and MacRumors will update this story with coverage of the conference call highlights.


Loose transcript of conference call ahead...

Click here to read rest of article...

Article Link: Apple Reports 1Q 2019 Results: Nearly $20B Profit on $84.3B Revenue, Second-Best Quarter Ever Despite Earnings Warning

 

[Scottsoapbox]

OMG fanboys it's simple: Stock price growth is based on company GROWTH. As in bigger than before.

It's not "doom and gloom". No one thinks Apple won't make sizable profits for the foreseeable future.

It's about growth: Is Apple going to get even bigger or plateau while other firms keep growing. That's what investors care about because growth is what increases stock price. If you aren't growing investors will go elsewhere to companies that are growing.

/end econ 101

 

[donaldK]

Cook also said "people are taking longer to buy new phones." Wishful thinking! These poor saps are clinging to a dead horse. It's as if Ford cut ll production and only sold one line of cars!!!! Although the smart phone was invented by IBM years before Jobs picked up on the idea and ran with it, he saw is still only one aspect of many in the company's portfolio. He truly as a visionary and long ago would have grabbed something new out of magician's hat. At least he wasn't monolithic!

 

[BuddyTronic]

Thank you... that's exactly what I was trying to say.

Further to that, how about spending $1000 yearly on cellphone service and the phone you have is an iPhone 5 or iPhone 6!

That’s truly baffling when my auntie does that!

 

[johnnygee]

Didn't stop the quants from punishing the share price, though. Now the shares are up 5.7% in after hours trading. They make money by driving the stock down and then repurchasing at the lower share price.

 

[Shanghaichica]

This strikes me as fishy - Apple missed their sales forecasts changes by a billion dollars from a date of just a month ago and a date after their books were already closed for the quarter! It's like Tim found another million iphone unit sales in the couch cushions after the end of the quarter.

This makes me think Tim did some window dressing on the numbers after he got some negative publicity and a swift kick in the stock valuation last month. It's making the stock price more volatile, and I don't think that's a sign of good management.
[doublepost=1548813579][/doublepost]

Actually the stock price should represent the discounted cash flow of the value of a share of Apple. The biggest impact on those shares will be the both the quantitive effect of decisions and earning today - and to a lesser extent - forecasts on those same things looking into the future.

Apple are always over cautious when giving sales estimates. I’m sure Tim was being conservative when he issued the warning at the start of the month.

 

[tito2020]

$84.3 B in revenue not earnings.

Amazon still laughing at Apple and Amazon spends less.

 

[BuddyTronic]

OMG fanboys it's simple: Stock price growth is based on company GROWTH. As in bigger than before.

It's not "doom and gloom". No one thinks Apple won't make sizable profits for the foreseeable future.

It's about growth: Is Apple going to get even bigger or plateau while other firms keep growing. That's what investors care about because growth is what increases stock price. If you aren't growing investors will go elsewhere to companies that are growing.

/end econ 101

I disagree.

Growth is part of it - but not all of it.
[doublepost=1548824007][/doublepost]

Amazon still laughing at Apple and Amazon spends less.

How so?

Without having to go look at anything, I’m guessing you are mixing up a quarter with a year and possibly millions with billions Or maybe I am missing something? That happens a lot!

 

[ipponrg]

Apple are always over cautious when giving sales estimates. I’m sure Tim was being conservative when he issued the warning at the start of the month.

I think he has to be now given that everyone is eyeing the company right now due to their recent missteps. If he were to overestimate, then you'd have another drop again in the stock. Tim Cook and Apple deeply care about the shareholders.

The real question is can it climb back up to where it was in September 2018. There are a lot of bankers that are thinking it won't hit that price for a few years, if at all. The growth trajectory seems debatable at the moment, so we'll have to see how Apple's foray into 3rd party services will come into play.

 

[Baymowe335]

Wrong wrong wrong in so so so many levels...

The reason it’s sales are down on the Uk if they are, is because of the OBSCENE prices Apple devices cost!
Lots of people stick to older iPhones and they aren’t going to spend a grand or go on three year contracts just to upgrade!
Plus the new iPad Pros cost as much as Mac laptops if you spec them out...

I’m afraid you’ve been listening far too much to ‘project fear’ because consumers are still happily spending.. they just don’t buy Apples prices as much now.
[doublepost=1548801953][/doublepost]

How are it’s services going to make up 62% of the companies earnings with falling iPhone sales? And that’s according to Apple themselves!
You watch that share price.... doesn’t matter what Cook claims. It’s the markets that will tell if it’s successful or not.

And the iPhone was around the £700 pound mark in the UK, since the X it’s been £999 and up, until the XR at £750 which apparently has flatlined in sales hence all the promotions and offers.

Active devices went up 100M. Some contraction in iPhone sales doesn’t mean the installed base (services) will cant grow. It grew 100M in a year and you just saw services grow 20% y/y, despite 15% lower iPhone revenue.

The non-iPhone revenue businesses at Apple are freaking growing at 19%.
[doublepost=1548824989][/doublepost]

Excellent quarter?! Hardly the proper definition for a company that lost a third of its value in a couple of months. Apple is now worth less than Amazon, Alphabet, and Microsoft by tens of billions of dollars. That's not a pretty sight for loyal Apple investors. What you consider excellent and what Wall Street considers excellent is quite a huge gap. Plenty of analysts have downgraded Apple to Hold because they know in their hearts Apple is in the toilet and that the iPhone business is being ruined by cheap Android smartphones made in China. Apple seems to be unaware the iPhone is being ripped to shreds by tech-heads who believe Android smartphones costing half the price of iPhones are better for consumers. Apple is the most poorly valued major tech stock by quite a margin and everyone knows this except Tim Cook.

Apple being doomed isn't a theory. It's a quarterly fact how investors never know how far Apple is going to fall. Apple investors can never say for certain Apple stock is going up after earnings. Earnings is a crap shoot for investors. It's just as likely Apple is doomed as not doomed. You watch as analysts tear this earnings report apart and arrive at the conclusion that next quarter will bring even more pain for Apple shareholders which means Apple is doomed next quarter, for sure. Analysts will say iPhone sales will be even worse next quarter and if that isn't giving Apple the kiss of doom, then nothing is.

Excellent isn't the right term to describe Apple's quarter. Questionable would be much better a term.

Take a look at Amazon since all you look at are stock prices. Why is that down over 22%?

Stocks go up and down. Apple just posted an amazing quarter. They have work to do in China, but let’s get real. The stock is cheap at these levels, trading at about 12X earnings. Their non-iPhone business is growing at 19% and they had an insanely hard compare on iPhone revenue last year. Currency headwinds and a bad year for the smartphone in general. China is falling off a cliff for MANY companies.

Earnings are what matter over time, period. Your entire thesis is based on the last 3 months where Apple has gone down like the rest of the market and many other tech stocks. They had issues in China like many other companies such as Nvidia, Samsung, Caterpillar, and Intel.

 

[ipponrg]

Take a look at Amazon since all you look at are stock prices. Why is that down over 22%?

Question back at you. Why is Apple still down 33% from their high?

I remember Ryan Warsaw mentioning buying Apple @ $190 per your excellent bullish advice. I got a chuckle thinking about that as you kept on parading your financial elitism except for that time when Apple fell off the cliff that erased all the gains for the year.

 

[Baymowe335]

Question back at you. Why is Apple still down 33% from their high?

I remember Ryan Warsaw mentioning buying Apple @ $190 per your excellent bullish advice. I got a chuckle thinking about that as you kept on parading your financial elitism except for that time when Apple fell off the cliff that erased all the gains for the year.

Apple is down bc of the broader market sell off and revenue guidance adjustment.

Amazon is just down, indicating stocks move without news sometimes.

I am a long term investor. My money says $190 will be a fine price over the horizon I will hold. My cost basis is far lower.

Apple makes money. That always wins over time. Earnings, baby. And cash. I’m very comfortable. Will add another 800-1,000 shares over the next few weeks.

Go look at NFLX, NVDA, GOOGL, AMD, and FB. Not a great 90 days for tech.

 

[BuddyTronic]

Question back at you. Why is Apple still down 33% from their high?

I remember Ryan Warsaw mentioning buying Apple @ $190 per your excellent bullish advice. I got a chuckle thinking about that as you kept on parading your financial elitism except for that time when Apple fell off the cliff that erased all the gains for the year.

On this topic of why is AAPL stock still way down from their high, I do actually wonder.

There are 4.7B shares. How many shares were bought back in this last quarter then? ZERO? It seems like the “buy shares back quickly” statement made back in July/Aug conference call was not sincere?

Didnt Apple promise to buy back shares? I thought they still has $80B earmarked for that buyback and that we would have seen a lot of buyback action, but I do think that this activity is missing! Absent!

There are many peculiarities and I’m looking for the answers. Lots of other things if interested.

 

[Romeo_Nightfall]

Apple had an excellent quarter, aside from the China downfall. 20 billion in profit and the overall services growth margin is outstanding.

So much for the ‘Doomed’ theory, again.

do you know the word doomed? this word is not used by people, that think apple is heading in a wrong direction.
its only used by people who still like apple.

i think - i ve heard that cook said a lot of things WE said, that iphone prices are too high internationally and that people hold longer to their phones.

so whats the point of you comment?
[doublepost=1548831980][/doublepost]

But Tim Cook should be fired, right guys? Right?

ähm, yes ... thats what WE want.
he is not what WE want for apple, i guess he has enough money to pursue happiness somewhere else!

 

[PickUrPoison]

On this topic of why is AAPL stock still way down from their high, I do actually wonder.

There are 4.7B shares. How many shares were bought back in this last quarter then? ZERO? It seems like the “buy shares back quickly” statement made back in July/Aug conference call was not sincere?

Didnt Apple promise to buy back shares? I thought they still has $80B earmarked for that buyback and that we would have seen a lot of buyback action, but I do think that this activity is missing! Absent!

There are many peculiarities and I’m looking for the answers. Lots of other things if interested.

Per the cash flow statement published today, Apple spent nearly $8.8B repurchasing their common stock.

Depending on the actual prices they paid during the quarter, it would be something in the neighborhood of 45 million shares. About 1% of their outstanding shares, it would support the stock by less than $2.00/share.

 

[Ramchi]

Article quote:

“Even with the earnings warning, the quarter was the second-best in Apple's history in terms of revenue and profit, trailing only the first fiscal quarter of 2018.”

I think this above statement proves that for those who want to see Apple ‘fall hard’, they haven’t. They still continue to grow in services, and the fact that this is their second best quarter in Apples history, says more than enough to debunk all the naysayers.

This is supposed to be bumper holiday quarter, typically Apple posts record earnings beating consistently it's other records. Some didn't even consider the holiday season record earnings as something a big achievements earlier, it was considered as matter-of-fact. Now we are seeing different story for the first time, isn't