Apple Earnings Report, Q1 FY 2019: Strong Margins, Weakening Revenueby Brett Howse on January 29, 2019 9:30 PM EST
- Posted in
- Financial Results
Today Apple announced their first quarter earnings for their 2019 fiscal year, and with the fortunes of the company so tied to the iPhone in a stumbling smartphone market, revenues fell despite some segments outperforming estimates. Revenue for the quarter was down 5% year-over-year to $84.3 billion. Gross margin was 38%, down 0.4% from a year ago. Operating income was down 11.1% to $23.3 billion, but thanks to lower taxes, net income was down only 0.5%, coming in at $19.97 billion. Earnings per share were at an all-time high, thanks to share buybacks, with a diluted EPS of $4.18, up 7.4% from a year ago.
|Apple Q1 2019 Financial Results (GAAP)|
|Revenue (in Billions USD)||$84.310||$62.900||$88.293|
|Gross Margin (in Billions USD)||$32.031||$24.084||$33.912|
|Operating Income (in Billions USD)||$23.346||$16.118||$26.274|
|Net Income (in Billions USD)||$19.695||$14.125||$20.065|
|Earnings per Share (in USD)||$4.18||$2.91||$3.89|
iPhone sales struggled, at least by Apple standards, and due to dropping unit sales, Apple has stopped reporting individual unit sales numbers. As such, we can only look at revenue, but this doesn’t paint a great picture either, with revenue down 14.9% year-over-year, to $51.98 billion. It’s still a huge amount of revenue for a single product category of course.
Despite the drop in iPhone revenue, not all news is bad for Apple. Both Mac and iPad had revenue gains this quarter, with the Mac up 8.7% to $7.4 billion, and iPad was up almost 17% to $6.7 billion for the quarter. Those gains definitely helped out when the iPhone took such a big hit.
Apple’s wearables, home, and accessories, which includes the Apple Watch, Beats, and more, also had a good quarter, with revenue up 33.3% over the holiday quarter. Without unit sales, it’s hard to break out what segments are doing well here, and with Apple adding new products to this category it also grows in that regard, but nevertheless, this is solid growth.
Apple’s services segment has quickly become their secondary unit for revenue, with continued growth of just over 19% year-over-year to $10.9 billion.
|Apple Q1 2019 Segment Revenue (Billions USD)|
|Wearables, Home, and Accessories||$7.308||$5.481||+33.3%|
For Q2, Apple is expecting revenues between $55 and $59 billion, with a gross margin of between 37 and 38%.
Source: Apple Investor Relations
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AdditionalPylons - Wednesday, January 30, 2019 - linkI'd love for Apple getting back to making fantastic computers again. I've been using Mac since 1994 and consider macOS the best operating system, but with multiple issues I can no longer defend buying ANY Mac in their lineup.
- Mac Pro: last updated in 2013!
- Macbook Pro / Macbook Air / Macbook: Non-upgradable RAM and SSD. Horribly thin keyboard with no typing feeling.
- iMac / iMac Pro: Any upgrades (except RAM on the 27" model) are extremely difficult. Last updated in 2017.
- Mac mini: Non-upgradable SSD. RAM upgrade possible but quite difficult.
Also note that non-upgradable also means that not even Apple can service a broken part, so the whole motherboard has to be replaced in case of failures! Where's the concern for the environment?
RSAUser - Wednesday, January 30, 2019 - linkYou're also missing that the SSD is soldered on and they have moderately recently removed the dedicated connector they had that could access the SSD directly if mobo didn't work.
If the 4 new macbook pro my friends have bought, only one of them hasn't been brought back for repairs. All our 2012 pro's are still doing well though even though at the time there was the huge graphics card fiasco. That keyboard is just totally messed up, just worried we'll suffer from the display cable mess up soon with how our luck has been going.
mrochester - Wednesday, January 30, 2019 - linkI love the nice clackky feeling of the MacBook Pro butterfly keyboards.
firewrath9 - Wednesday, January 30, 2019 - link"clackky" macbook keyboards are not "clacky", they just get dust stuck under them.
firewrath9 - Wednesday, January 30, 2019 - linkno apple device has a replaceable SSD, all of them are apple-specific. Looking at the base model imac 27", a 1TB SSD costs 700$ as an upgrade. a 2TB samsung 2TB NVMe SSD costs 550$. a 4TB sata SSD costs 700$. wtf apple?
yannigr2 - Wednesday, January 30, 2019 - linkThose latest results from Apple, explain why the US government is trying so hard to destroy Huawei.
Gunbuster - Wednesday, January 30, 2019 - linkI'm curious what the official job title is for the person that has to go around apple riding herd on engineers making sure they don't design out too many flaws or make the glass/cases too good so the yearly revenue keeps rolling in?
rrinker - Wednesday, January 30, 2019 - linkI think the term you are looking for is "marketing manager" Or perhaps higher up, Director of Marketing.
bigvlada - Wednesday, January 30, 2019 - linkCatbert
SquarePeg - Thursday, January 31, 2019 - linkApple needs a recession so they can reset revenue expectations while everyone else is getting hammered down also. I also look at their margins and wonder how can they only be 38%. Apple has a lot of corporate fat to trim as they are getting incredibly bloated. Too much hubris, Too little innovation.