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

[Carnegie]

missed estimates and they sold less iphones than last year, which was a down year...

EDIT: also, last year's flagship iphone sales number is also inherently lower as the iPhone 7 was released in Q3. This year, the iPhone X came out in Q4. So this year's numbers, which included ALL new iPhone sales in 2017, still didn't beat last year's lower and truncated iPhone sales number... I'm not sure that's a positive.

That should cut the other way. This year, the top-tier model (the iPhone X) was only available for a little over 8 weeks of the quarter while last year the top-tier model (the iPhone 7 (and Plus)) was available for all 14 weeks of the quarter.

Also, the iPhone 8 (and Plus) were only available for 13 weeks (in Q1) this year whereas the iPhone 7 (and Plus) were available for 14 weeks (in Q1) last year. And all of those models were available for 9 days in the previous quarters.

 

[bozzykid]

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).

Worrisome to investors is much different than general worrying about a companies future.

 

[teknikal90]

That should cut the other way. This year, the top-tier model (the iPhone X) was only available for a little over 8 weeks of the quarter while last year the top-tier model (the iPhone 7 (and Plus)) was available for all 14 weeks of the quarter.

Also, the iPhone 8 (and Plus) were only available for 13 weeks (in Q1) this year whereas the iPhone 7 (and Plus) were available for 14 weeks (in Q1) last year. And all of those models were available for 9 days in the previous quarters.

you're right. I thought about it wrong my mistake.

 

[jonblatho]

I noticed iPhone is now 70% of total revenue? That number should be going the opposite direction for long term growth.

That percentage has wavered between the upper fifties and 70 for quite some time now. It normally peaks in the holiday quarter.

 

[Glideslope]

The iPhone ASP was $796.

Of course when you give people a choice of only 32 or 256g.

 

[yadmonkey]

Tim Cook reminds investors that this quarter was 13 weeks, compared to 14 weeks in year-ago quarter. Apple's growth was actually 21% year-over-year on an adjusted basis.

Something tells me this tidbit will be omitted when reporting next year's earnings.

 

[bozzykid]

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

Are you considering the price of iPhone in only the US? Outside of the US saw rather large increases across the board. At the end of the day, without the numbers, it is really hard to say what caused the increase (likely increased prices and the X).

 

[cycomiko]

Looks like a stable market to me, with peaks during product refreshes. Overall Mac sales have been growing stronger than PC OEM sales.

How can a stable mac market, flat in sales volumes, be growing.

 

[Rogifan]

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

Last year March quarter Apple reported 52.8B revenue. 60-62B would be a 14-17% revenue increase. What is Wall Street basing a 24% revenue increase on? Only once has Apple announced a YOY revenue change that high - the March 2015 quarter with 27% YOY revenue growth. That was the second quarter of the iPhone 6 launch.

 

[chatin]

The Apple business model does not seek to grow sales beyond an ability to service premium customers but shrinking unit shipments should be a cause for concern. Apple will get a shakeup at the top. That's good news for everyone except the leadership team Jobs put in place seven years ago.

 

[Glideslope]

That percentage has wavered between the upper fifties and 70 for quite some time now. It normally peaks in the holiday quarter.

Actually the last 4 years averaged 64% prior to Q1 2018.

 

[CWallace]

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

Samsung had a $235 ASP in Q2 2017. Their record was $289 during the Galaxy S4 era.

Q4 2016 numbers were:

Apple: $691
Sony: $422
HTC: $237
Samsung: $225
LG: $210
Microsoft: $186

 

[fchain]

the QTR was a week shorter...that would mean an 86MM QTR

 

[Act3]

"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.

how is that spectacular in a good way?

If, for instance for every $1000 iPhone X sold , and someone else bought the lowest model 6s, the average would be $725... Keep in mind that the 8 started at $699 this year and the 8+ at $799

 

[Rogifan]

Something tells me this tidbit will be omitted when reporting next year's earnings.

Omitted by who? Cook mentioned it every year it happens.

 

[chucker23n1]

When comparing against Q1/17, it should be noted that that quarter was an outlier in terms of having 14 weeks rather than the typical 13. When you factor that in, the y-o-y changes are quite different.

 

[Carnegie]

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).

Yeah, it's an incredible unit number at that ASP. And that's with the premium model only being available for a little over 8 weeks.

I'm, of course, interested to hear the channel build to see how sell-though compared YoY. Last year the build was 1.2 million, so iPhone unit sell-through was 77.1 million.

 

[DaveOP]

they sold 1M less iphones than same quarter last year.

With a week less of sales in the quarter, and a phone that launched very late in the quarter. The raw number is meaningless.

 

[CWallace]

Of course when you give people a choice of only 32 or 256g.

And yet two years ago we were complaining about giving people a choice of only 16GB or 64GB and why wouldn't Apple set the base memory at 32GB?

How can a stable mac market, flat in sales volumes, be growing.

Because the PC OEM market has been generally contracting. So even the same number of Mac sales is an increase in terms of marketshare percentage.

 

[The Game 161]

Incredible numbers as Apple still continues to dominate the market in sales

 

[scrapesleon]

profit upon profit

 

[Carnegie]

you're right. I thought about it wrong my mistake.

Well, there are reasons why that difference would cut both ways. So I understand why you initially thought of it that way. But on the whole it should cut (meaningfully) the other way.

 

[deanthedev]

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.

Seems like you're the one breathing hard, and can't stand a little fun being poked at those naysayers. Or you're blind to how many people have actually said the things I posted.

 

[Rogifan]

Are you considering the price of iPhone in only the US? Outside of the US saw rather large increases across the board. At the end of the day, without the numbers, it is really hard to say what caused the increase (likely increased prices and the X).

Tim Cook said the X was the best selling iPhone every week since it started shipping.

 

[jonblatho]

Actually the last 4 years averaged 64% prior to Q1 2018.

Sure, but in the grand scheme of things, growing in share of total revenue by a percentage point YoY, especially given iPhone’s huge jump in ASP, seems like nothing much to worry about. If it were a more dramatic long-term growing trend I’d be more worried, but it’s not. It’s been roughly flat or decreasing.

 

[Carnegie]

Something tells me this tidbit will be omitted when reporting next year's earnings.

Why would it need to be noted next year? The comparison will be between a 13-week quarter and a 13-week quarter. This year and last year the comparisons were between quarters of different lengths.