Apple Reports Fourth Quarter Results

[chollida1]

Making my running notes again from the earnings report and call.....

Numbers:

- $52.6 billion in revenue, up 12% YOY

- 46.7 million iPhones sold, up 2% YOY for revenue

- 10.3 million iPads sold, up 14% YOY for revenue

- 5.4 million Macs sold, up 25% YOY for revenue

- $8.5 billion services revenue, up 34% YOY

- $3.2 billion other products revenue, up 36% YOY

- Q1 guidance: $84 to $87 billion, a record high.

- 4Q EPS $2.07, Est. $1.87

- 4Q Rev. $52.6B, Est. $50.7B

Where it came from:

- China is back to growth with 22% quarter over quarter and 12% year over year revenue growth. Europe saw the strongest year over year revenue growth, up 20%. The U.S revenues increased year over year by 14%, while the rest of the Asia Pacific increased by 5% year over year.

- Apple announces it sold 46.7 million iPhones in Q417, compared to 45.5 million units in the year-ago quarter. This is in line with expectations. This represents a year-over-year 3% unit growth and 2% revenue growth, suggesting slightly more people are buying higher priced iPhones like the 7 Plus and 8 Plus.

- Apple sold 10.3 million iPads in Q417, compared to 9.3 million units in the year-ago quarter

- for the Apple Watch, Apple Pay and Apple TV products... The 36% year-over-year growth for this category, meaning Apple Watch and AirPods sales have been strong.

- Apple announces it generated $8.5 billion in revenues on services, which includes the App Store and Apple Music, in Q417. This is 34% growth from $6.3 billion in the year-ago quarter and 17% quarter over quarter growth.

- Apple sold 5.4 million Macs in Q417, representing 10% unit growth year over year. Mac revenues are up 25% year over year

[austenallred]

The scale of this is baffling. They earned the entire value of Tesla or Ford in profit in the past quarter. Apple's market cap has increased almost $400b in the past 18 months.

Holy shit.

[alwillis]

Here's what's nuts:

Apple’s market cap is just under $900 billion dollars[1]; as crazy as it sounds, unless something totally unforeseen happens, they could be at a $1 trillion market cap a little over a year from now, after 2018's holiday quarter with a full year of iPhone 8/8+/X sales, the successor of the iPhone X, plus sales of the iMac Pro starting at $4999 each and the Mac Pro and all of the rest of lineup.

[1]: https://ycharts.com/companies/AAPL/market_cap#recessions=fal...

[fancyfacebook]

25% increase in macs sold is huge, not sure if this was just a weird spike or not but that really stands out

[bgarbiak]

"This represents a year-over-year 3% unit growth and 2% revenue growth, suggesting slightly more people are buying higher priced iPhones like the 7 Plus and 8 Plus."

Isn't that the other way around? More units were sold, but at slightly cheaper price. If they were more expensive the revenue growth rate would be greater than 3%.

[wnevets]

>- 5.4 million Macs sold

Do you have the units sold YOY?

[kpwagner]

The iPad is dead... lol. Only 10.3 millions units sold last quarter.

[brlewis]

for the Apple Watch, Apple Pay and Apple TV products... The 36% year-over-year growth for this category, meaning Apple Watch and AirPods sales have been strong.

How do you come to that conclusion? Couldn't it simply be that one of those products is selling better than a year ago?

[IBM]

Narrative killer: Mac unit sales up 10% YoY, revenue up 25% YoY

[dpkonofa]

I'll never understand this. The pattern is the same every year. They announce a product, "journalists" say it's a failure, they sell more units and make more money than ever before, and the cycle repeats. Apple will definitely drop the ball someday but I think people are a little too quick to make that call. I realize most of that is in the never-ending quest for clickbait but still...

[brianpgordon]

Tim Cook mentioned specifically that the Mac growth was driven by China. So keep that in mind.

[djrogers]

What narrative would that kill?

[draw_down]

Ha, nothing kills the “Apple is doomed” narrative.

[not_that_noob]

And iPhone X (exxx not ten) will blow it out of the park. Cook's da man.

[ihuman]

MacStories has some nice visualizations of the new quarterly results compared to previous quarters. https://www.macstories.net/news/apple-q4-2017-results-52-6-b...

[dmode]

$87 billion projected for Q4. What an empire they have built. Amazingly impressive. And all I heard over the last 4-5 years was how Apple was doomed

[hashmal]

> all I heard over the last 4-5 years was how Apple was doomed

Shows how the press is extremely focused on buzz. Doom predictions sell.

[shmerl]

It's not necessarily a good thing. Apple are quite nasty. And the bigger they are, the more damage they can cause.

[djrogers]

Interesting to hear the execs talk about iPhone sales in a manner that explicitly refutes the rumors of iPhone 7 outselling 8:

“They instantly became our two most popular iPhone models and have been every week since then.”

[vermontdevil]

$269 billion in cash. Insane to think about that.

[microtherion]

It's worth remembering, though, that Apple has about $100 billion in debt, so net cash is not quite that impressive.

[danjoc]

$269 billion in tax avoidance.

[pwtweet]

Walt Mossberg‏ @waltmossberg Perspective: Mac revenues alone in Apple’s qtr just released were $7+ billion. At an annual rate, that would put the Mac in the Fortune 100.

Is Walt correct on this?

[bradfa]

If they do a quarter like this past one for macs for the upcoming three quarters then Mac sales would be on the cusp of being in the Fortune 100, not just in the 500!

http://fortune.com/fortune500/list/

[diminish]

year-over-year 3% unit growth for iPhone units. So generally are we at the end of mobile absorption by humanity and mobile growth? From now on instead of market growth shall we see market share competition? Apple is lucky to sell more expensive iPhones and better margins with better ASP. Carriers are still the big driver by bundled tariffs and that helps high end smartphone sales.

[camillomiller]

End of growth is not end of absorption. Still 40 to 50 M phones sold every quarter... I think seeing everything through the financial growth lens really keeps us from grasping how steadily a stagnating Apple would still be physically growing.

[speeq]

Doesn't include iPhone X sales, next quarter results will be interesting.

[elefanten]

We are not at the end because there are still lots of people in less developed areas to reach.

[MarkMc]

Income before tax: $13.9 billion

Income tax: $3.2 billion

So Apple's effective tax rate is 23%. Honestly that's better than I expected, but still less than it should be. Federal corporate income tax is 35% and California adds 8.84%. So there are other California companies which pay almost twice as much tax as Apple.

(Keep in mind that almost all of the value created by Apple is created in California. If Apple were to outsource all their sales and be a purely Californian company then it would make almost the same amount of pre-tax profit)

[adventured]

> So Apple's effective tax rate is 23%. ... Honestly that's better than I expected, but still less than it should be. ... Federal corporate income tax is 35%

That's misleading. You're comparing their global effective tax rate versus the US Federal rate. The question is how much did Apple pay in taxes in the US, on US-based profits.

23% isn't less than it should be, it's extremely reasonable compared to rates around the world. The OECD average statutory corporate income tax rate is around 24% (the effective rate is even lower).

The average effective corporate income tax rates for 2012: UK, 10%; Germany, 14%; Canada, 16%; Australia, 17%; China, 19%; France, 20%; South Korea, 20%.

Even Scandinavian nations like Finland (20%) or Sweden (22%) have lower statutory rates (to say nothing of the effective). Denmark has a reputation for having a government spending rate that is among the highest on earth among developed nations as a share of its economy, and its statutory rate is merely 24.5%.

[fragsworth]

I have a question. What are the "Services" they refer to in the article? Are these B2B and/or government contracts, the kind which Oracle/IBM are well-known for?

[jimbokun]

App Store and Apple Music are probably the biggest contributors here.

[_s]

iCloud, iTunes, storage etc I think.

[r00fus]

Apple doesn't really do B2B in any major fashion that doesn't involve their core product lines. So answer to your question is no.

[pentae]

iTunes and App store - mostly the 30% IAP tax they take from developers I'd imagine.

[submeta]

Somehow happy and delighted to see this

[sssilver]

Offtopic -- what's up with the digit 1 in [email protected], [email protected]?

[jkeat]

Either they weren't the first ones at Apple with those last names, or they're avoiding bots that guess email addresses.

[Aron]

Come on Apple. Buy Tesla. Let's go. OBVIOUS.

[Aron]

This site is pretty good at sniping comments that would pass a 'is this reddit quality?' discriminator on generic NLP but I think the underlying idea is interesting under the context of 'what now brown cow?' Elon Musk has done his job getting EVs kickstarted. I suspect he's happy to move along and work on tunnels and rockets. Tesla principally needs some capital security, some quality tech managers and bench, and some just plain maturity in investor relations. The two would do pretty well in brand alignment in general. Apple needs, on a shareholder concern basis, to find markets of large enough size to matter, and Tesla has its toes in some extremely large markets. Anyway that's the hypothesis for those that want to ponder 'how does Apple do something other than make iPhones'. Thanks for the downvotes anyway, bots.