Apple Reports Record Results for 1Q 2018: $20B Profit on $88B Revenue, 77.3M iPhones

[Baymowe335]

I’d be willing to bet it’s mostly iPhone 7 / 7+ being sold.

Can't be. ASP was nearly $800. The X sold VERY well and saved the quarter.

$61.5B in iPhone Revenue this year versis $54.3B last year. The is entirely an iPhone X story and they should be glad because the iPhone 8 and others didn't sell well enough.

I am surprised and somewhat disappointed.

 

[Swift]

How is this even possible?

On the iPhone X:

• It's way too expensive at $1,000. Nobody will pay that much.
• FaceID is useless, bring back TouchID.
• That notch. Not only ugly but interferes with all my content and videos.
• Glass back? I don't want a fragile phone.

On the iPhone 8:

• Not enough of an upgrade from the iPhone 7.
• They still kept the same basic design? Lame.

On Macs:

• Still no Mac Mini updates? People are waiting.
• iMac Pro? I can build a machine for 1/2 the price that's 3x as fast.
• Still only 16GB on the MBP? I require 32GB to be productive.

So my question for all the naysayers and analysts is this. How does it feel to be wrong? Not just wrong, but utterly and spectacularly wrong?

Glad you don't run Apple.

 

[firewood]

What do these Mac numbers show us? A stagnation, greed, or both?

Q1 12 - 5.20M Macs, $6.60B Revenue
Q1 13 - 4.06M Macs, $5.52B Revenue
Q1 14 - 4.84M Macs, $6.34B Revenue
Q1 15 - 5.52M Macs, $6.94B Revenue
Q1 16 - 5.31M Macs, $6.75B Revenue
Q1 17 - 5.37M Macs, $7.24B Revenue
Q1 18 - 5.11M Macs, $6.90B Revenue

They are holding their own with much higher profit margin products than the competition. So greed.

How is this even possible?

It's possible because the naysayers are delusional. The only significant negative is related is 1M less iPhones sold (possibley because the X was late in availability compared to earlier product cycles, and a few buyers waited).

 

[Rogifan]

...or that they increased the prices outside North America by 10-15% for virtually all of their products

They increase prices for a reason though don’t they? Meaning those increases wouldn’t flow to the bottom line.

 

[lazard]

It is amazing to me that a company can sell 77.3M of something with an average selling price of $796 and it’s considered a worrisome number that will require a lot of explanation on the earnings call (commentary I’m seeing in my Twitter feed).

It's more to do with their weak forecast than announced results. $60-62B revenue vs estimates of $65.44B.

 

[HobeSoundDarryl]

Ah, no I didn't.

Look it up, it's not trivial anymore. Hint: we can no longer sling around "$2XX Billion in the bank..." unless we opt to leave it out (too).

How much is it? Can't seem to find a valid accirate value.

According to Marketwatch, it is now just under $104B.

Thus, net cash is now down to about $180B... still crazy impressive for any company to have so much cash but that debt just keeps piling up (cheap or not).

 

[Adelphos33]

In terms of iPhone unit sales, the key to significant growth will be introducing a blockbuster $799 phone. The 8/8+/X strategy was good this year, but for more unit growth, they need to convince basically everyone to upgrade to new phone next year and steal share away from Android. That requires a "buzzier" phone at $799.

 

[Baymowe335]

It is amazing to me that a company can sell 77.3M of something with an average selling price of $796 and it’s considered a worrisome number that will require a lot of explanation on the earnings call (commentary I’m seeing in my Twitter feed).

It has gotten almost comical, however I would have liked to see a stronger showing from non X phones. It's clear the X totally dominated to BLOW out the ASP expectation of $750 and be closer to $800. Phenomenal.

I think they hung on with iPhone 8 just a bit too long and weren't ready with enough iPhone X production. PERHAPS we will see a better showing in Q2 in terms of unit sales. I am happy with ASP, however.

$20b in profit though...gasp.

 

[teknikal90]

They are holding their own with much higher profit margin products than the competition. So greed.



It's possible because the naysayers are delusional. The only significant negative is related is 1M less iPhones sold (possibley because the X was late in availability compared to earlier product cycles, and a few buyers waited).

iPhone X was eventually released and available in Q4...which is the quarter being reported. Sales from those who did wait would have been captured in this Quarter.

 

[Act3]

Can't be. ASP was nearly $800. The X sold VERY well and saved the quarter.

$61.5B in iPhone Revenue this year versis $54.3B last year. The is entirely an iPhone X story and they should be glad because the iPhone 8 and others didn't sell well enough.

I am surprised and somewhat disappointed.

X probably sold less than the 8+ and below. Something brought average price of iPhone sold last quarter to $796

 

[Swift]

I notice the press is covering this as "missed expectations." Whose expectations is the question. Why would they take Apples and add $10 billion. So they can pretend to be "disappointed"?

 

[CWallace]

Except PC OEMs saw growth in the current quarter. As MarketWatch put it, if HP is growing and you aren't, there's a problem.

HP needs 300% more sales to generate 30% more revenue than the Mac Division so it's clear that what HP is selling the most of is very inexpensive models.

I think they should be quicker in keeping the MacBook Pro up to date, as well as the desktop Macs.

There were seven months between the Late 2016 and Mid 2017 MacBook Pro updates. Intel and AMD can develop CPUs and GPUs only so fast. iMac went about three times that, but again, Intel did not ship the CPUs until early 2017 and Apple adopted them within months.

It may also be time to lower the 12" MacBook price. It's a bit silly that the MacBook Air is still being sold.

The MacBook Air is there to meet a price point because laptops make up 80% of Mac sales. They could drop the SSD from 256GB to 128GB (same as entry-level MBA) to save $100-150 at retail, but it would still be an over $1000 machine.

 

[Breaking Good]

How is this even possible?

On the iPhone X:

• It's way too expensive at $1,000. Nobody will pay that much.
• FaceID is useless, bring back TouchID.
• That notch. Not only ugly but interferes with all my content and videos.
• Glass back? I don't want a fragile phone.

On the iPhone 8:

• Not enough of an upgrade from the iPhone 7.
• They still kept the same basic design? Lame.

On Macs:

• Still no Mac Mini updates? People are waiting.
• iMac Pro? I can build a machine for 1/2 the price that's 3x as fast.
• Still only 16GB on the MBP? I require 32GB to be productive.

So my question for all the naysayers and analysts is this. How does it feel to be wrong? Not just wrong, but utterly and spectacularly wrong?

I will respond by saying this. Nobody is this good.

Remember Enron. Remember MCI/Worldcom. Remember Lehman Brothers.

 

[teknikal90]

It is amazing to me that a company can sell 77.3M of something with an average selling price of $796 and it’s considered a worrisome number that will require a lot of explanation on the earnings call (commentary I’m seeing in my Twitter feed).

it's because apple is trading at 18x earnings. which means that it's selling with the presumption that it will at least make the same profit numbers for at least 18 years. given that 70% of revenue is iphone, any sign of iphone sales stagnating is a big knock on that presumption.
at least that's in theory.

 

[Rogifan]

As I posted above, revenues are way up despite flat sales. Which means devices sold are higher priced. I doubt they sold a ton of iMac Pros so we’re left with the iPhone X.

I don’t care what Wall Street says. Bunch of liars and crooks manipulating stocks for their own benefit.

Can’t stand Wall Street either just pointing out there’s only one number they seem to care about...iPhone sales. But just as I type this I see the stock is now up 1% after hours. Wonder where it will end up tomorrow.

 

[bmark]

They missed street unit estimates by 3 million units - sold 77.3 million phones vs 80.2 million estimates. They also sold fewer 1% fewer phones than last year. So much for the "mega cycle" predicted by some analysts.

Apple's Q2 numbers are going to be even worse. Demand for the X has slowed big time!

 

[deanthedev]

Agree. X naysayers were totally wrong and it was ironically the X that saved the quarter. 77.3M is not a great number (I certainly expected 80M+). However, ASP was almost $800, so it appears the iPhone X actually saved them. The X must have been a huge part of the mix and the iPhone 8 disappointed.

iPhone revenue was a record at $61.5B versus $54.3B last year.

iPhone X was DEFINITELY a savior here. iPhone 8 is truly the disappointment. I am actually not happy with the 77.3M iPhones and I blame it almost entirely on the too boring iPhone 8.

Exactly. People wanted the X and Apple sold a ton of them.

The only reason their overall iPhone sales were down is because of this. The X was only available for 2 months of the quarter and it still sold in high enough numbers to raise their ASP to almost $800.

Their guidance for next quarter ($60-62 billion) is $7-9 billion more than last year. Clearly they expect iPhone X demand to continue into the new year.

 

[Merkie]

In terms of iPhone unit sales, the key to significant growth will be introducing a blockbuster $799 phone. The 8/8+/X strategy was good this year, but for more unit growth, they need to convince basically everyone to upgrade to new phone next year and steal share away from Android. That requires a "buzzier" phone at $799.

The challenge is to this while at the same time not eating the $1000 iPhone.

 

[Adelphos33]

Overall, relative to expectations and Apple's size, these results are "fine." Unit sales across all three major hardware products are kind of static, but pricing is increasing. Services and "other" (Airpods, Watch) are really driving the growth today.

 

[69Mustang]

Did you read my post? The countless number of people who said the iPhone X would be a flop, for the reasons I stated. Are you going to claim you’ve never heard any of the excuses I gave?

No, I'm going to claim you're creating an unfocused rant railing against analysts and forum members as if they've been standing around a campfire chanting "doom-doom-doom". That isn't the case. As I said, universal consensus has been that Apple would have a record setting quarter. I'd be hard pressed to find an analyst that states differently.

That post reads as if you were breathing pretty hard when you wrote it. And after you finished it.

People in the threads claiming doom should only be taken with a grain of salt. They aren't analyst even though we all think we are. This is my prediction from yesterday.

$88B total
Services up - this is the rising star in my opinion
Other up - steady gradual incline
Mac flat - macs have significantly increased/decreased in a long time. 5.3 Million give or take.
iPad down - it is what it is. Maybe that cheaper model boosted holiday sales. Maybe not.

I can be an analyst too.

 

[santaliqueur]

"Apple's average selling price for iPhone was $796"

This number is spectacular, and I'm sure Apple is thrilled with it. To me, it's the most important number we see today.

 

[44267547]

Still waiting for Apple to slow down....

Services growth is going to be a great growth vehicle in the years to come. And I wouldn't be surprised if Apple makes a huge acquisition once they bring all of that cash back to the US. Either into a new category or the purchase of a large services company. I think it's inevitable.

Services is huge for Apple and that's where the continued growth needs to be aside from hardware sales. I'm willing to believe if Apple stop selling hardware altogether, they could easily still survive just on what they have made from services in generated revenue.

 

[Glideslope]

Wish Apple would release figures for the X.

In a few weeks the unit specific numbers will leak out. Most likely 30 million X. I noticed iPhone is now 70% of total revenue? That number should be going the opposite direction for long term growth. Especially with 60 Billion guidance for Q2.

 

[CWallace]

I will respond by saying this. Nobody is this good.

Remember Enron. Remember MCI/Worldcom. Remember Lehman Brothers.

But Apple doesn't have Arthur Anderson as their accountants.

 

[Merkie]

"Apple's average selling price for iPhone was $796"

This number is spectacular, and I'm sure Apple is thrilled with it. To me, it's the most important number we see today.

Does anybody have some industry references to add here? I'm sure most (if not all) competitors barely even hit the $400 ASP.

 

[The Samurai]

iPhone X is popular in the US and Europe as far as I notice, but I do not know many friends in Asia who own that. The price is too high for many countries. The phone practically costs you one month worth of salary to a lot of third world countries. I love my iPhone X, but I am skeptical it will continue to sell in Q2. Just my two cents.

Just back from China. iPhone X is everywhere. I was at one of the hospitals visiting a friend and was shocked when a 'nurse' pulled one out!