What a difference a week makes: Apple's $88.3 billion quarter is even more impressive brok...

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in AAPL Investors
Not only was Apple's holiday quarter of 2017 a hard compare to previous year's numbers because of three flagship models, but the year-ago quarter had an extra sales week. AppleInsider breaks down the numbers for a closer look at Apple's earnings, on a "average per week" basis.




Apple's first fiscal quarter of 2018 was a blockbuster. Apple broke its revenue record it posted a year ago, and posted revenue of $88.3 billion dollars. The results were built on the foundation of 77.3 million iPhones sold in the quarter -- led by the iPhone X.

The only thing that it may have disappointed on was that 77.3 million iPhone sales volume, but it more than made up for that in an average selling price of $796.42 per unit, as well as a dramatic increase in services and the catch-all "other" category."

But, a lot of time was given in the question and answer session following the earnings report both last year, and this year, to the fact that not all quarters are the same, from a sales week perspective. There are two ways to look at this mathematical oddity -- the first is comparing quarter to quarter on an average sales dollar per week basis. The graph below illustrates the tale, but in the 14-week quarter a year ago, Apple generated $5.60 billion in revenue per week, with it topping $6.79 billion a week in the most recent holiday quarter.




The other way to examine the data is projecting if the holiday quarter was a 14-week one, what would Apple have made given the same volume of sales and earnings.


Lies, damn lies, and statistics

In the U.S., companies report on a quarterly basis, so we periodically get a quarter that's one week longer than the previous one, with the resultant mathematical oddities and bad compares. That reporting period is monthly in some others -- it's all for consistency, and it all comes out "in the wash," so to speak. But, that one week can make for some difficult comparisons, from time to time.

As far as the future goes, Apple's predictions for the next quarter are (obviously) lower than the holiday quarter. It's the nature of the holiday season, and an iPhone release purchase cycle four full months prior at the start of the quarter.

But, even those numbers are ridiculously higher than last year's, by a full $9 billion. Apple is predicting to make between $60 billion and $62 billion in the now-current quarter, with the year-ago quarter having actually hit $52.9 billion.

If nothing else, coupling with what Apple is predicting for this quarter, combined with looking at the holiday's sales data on a quarterly or weekly basis just takes a different angle of approach to what Apple has said all along -- that there is no wavering in the strength of the iPhone X because of a hypothetical weak demand, as poorly predicted by Nikkei and other prognosticators.
lolliver
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Comments

  • Reply 1 of 30
    NY1822NY1822 Posts: 498member
    Great job Mike/Malcolm...much appreciated 
    Muntzwatto_cobralolliver
  • Reply 2 of 30
    Thanks for hitting home just how nonsensical investors' reactions have been to this amazing news!  Their only complaint is that Apple didn't hit their own expectations, but seeing how dramatically their view on Apple swings, they clearly know little about the business and should be ignored.

    Muntzbaconstangwatto_cobrabshankradarthekatlolliverTomE
  • Reply 3 of 30
    Weird how October+November+December 2017 (31+30+31 days) is somehow a week less than those same three months of 2016.

    (Presumably it's because they "close the books" on sales at the end of every week rather than daily, but still.)
    MisterKit
  • Reply 4 of 30
    mubailimubaili Posts: 377member
    damn, why can't Apple just do calendar quarter? Is there any tech reason? 
    watto_cobra
  • Reply 5 of 30
    jkichlinejkichline Posts: 1,292member
    Weird how October+November+December 2017 (31+30+31 days) is somehow a week less than those same three months of 2016.

    (Presumably it's because they "close the books" on sales at the end of every week rather than daily, but still.)
    Apple runs in periods that roughly correlate to months but are based on weeks. For instance, January may be a 5-week period, February a 4-week, March a 4-week, April a 4-week and May a 5-week...  this allows weeks to be measured more "Apples-To-Apples" aside from the 4/5 week differences.  If you use months alone, you have an issue where here are variable days in each month.

    Some corporations fix this by dividing the year into 13, 4-week periods but they you can't evenly divide the year into quarters.
    randominternetperson
  • Reply 6 of 30
    Weird how October+November+December 2017 (31+30+31 days) is somehow a week less than those same three months of 2016.

    (Presumably it's because they "close the books" on sales at the end of every week rather than daily, but still.)
    Strange to me too.  I didn't realize Apple did this until yesterday.  I can see where it would make comparability somewhat more consistent in that every quarter has 91 days except for one quarter every few years.  Done on a three-month basis the quarters would have between 90 and 92 days.

    To me, since Apple does have so much seasonal variance in revenue, it would make more sense to do a 3 month quarter so the only variance between same-quarter comparability would be the one day during leap year in the Jan-March quarter every four years.  Having an entire additional week packed into your busiest quarter really distorts things by a much higher percentage.  Same-quarter comparability between fiscal years is more important to me than consecutive quarter comparability when taking into account the timing of Apple's varying revenue stream.

    This will also make year-over-year comparability screwed up as last year had 53 weeks where this one will have 52.
    edited February 2 randominternetpersonneil anderson
  • Reply 7 of 30
    Meanwhile stocks are falling down!!
    now at 163$, last week around 170$!
    Wall street is just crazy!!!
    MuntzStrangeDayswatto_cobrajony0
  • Reply 8 of 30
    I can't remember the weekly numbers they gave in the conference call, but if my math based on the quarterly numbers is right, weekly iPhone unit sales were up 7.1% YoY (~6M vs. 5.6M), weekly revenues were up 21.4% ($6.8B vs. $5.6B), and weekly net profit was up 21.1% ($1.55B vs. $1.28B), all of which is incredible given the numbers they were already dealing with, and given the fact that their highest-priced and best-selling phone wasn't available at all until November, and supply was still fairly limited in mid-December.
    edited February 2 palomineMuntzlolliver
  • Reply 9 of 30
    Just looked at my AAPL holdings and nearly choked at the size of the drop today, after expecting to see some sort of rise based on after-hours trading yesterday.
    Muntz
  • Reply 10 of 30
    FolioFolio Posts: 336member
    A few excerpts from BoA Merrill Lynch report on Apple today, that bolsters your good article (emphasis in bold added):

    --In F1Q18, Services revenue grew 18% y/y, as reported. However, C4Q16 (F1Q17) quarter had the benefit of $700mn due to an extra week. Excluding that benefit, Services grew 31% y/y, which is strong growth and is more than the 24% y/y adjusted Services growth in the Sep 2017 quarter (F4Q17). The Sep 2017 quarter than a benefit of $640mn due to one-time revenue recognition adjustment. 

    -- China remains a key market for Apple. Revenue from Greater China grew double-digits y/y for the second quarter in a row (11% y/y). However, investors should keep in mind that the year ago quarter had 14 weeks. On an average weekly revenue basis, revenues in Greater China grew 19% y/y. In urban China (and in the US), the top five smartphones last quarter were all iPhones. 
    lolliver
  • Reply 11 of 30
    tzeshantzeshan Posts: 1,687member
    Apple is down because Wall St is looking for safety in the face of rising interest rates. BitCoin is the first casualty of rising interest rate. The list should start to pile up. Whether the economy can land safely is a big question. This issue probably will be raised after the next Fed rate hike. 
  • Reply 12 of 30
    radarthekatradarthekat Posts: 2,469moderator
    Weird how October+November+December 2017 (31+30+31 days) is somehow a week less than those same three months of 2016.

    (Presumably it's because they "close the books" on sales at the end of every week rather than daily, but still.)
    They close each quarter in the last Saturday of the quarter.  So a quarter that ends on a Friday automatically loses six days, for example.  Knowing this, one needs only inspect the calendar.  
    edited February 2 baconstangGG1lolliver
  • Reply 13 of 30
    There are analysts out there who constantly brag about Apple to drive the stock up, sell the stock, then post BS claims about Apple to drive the stock back down so they can buy more of it and start driving it back up again. This should be illegal, but it's not. Short selling should be illegal, but it's not. I hope that every single analyst who posts their false stories loses everything they have in the market. They deserve it. 
    baconstangyojimbo007watto_cobralolliver
  • Reply 14 of 30
    Just looked at my AAPL holdings and nearly choked at the size of the drop today, after expecting to see some sort of rise based on after-hours trading yesterday.
    Sell APPL and buy AMZN. They seem to be the sure fire bet to get to $1T first. Personally, I would not be seen dead owning any Amazon stock. Yes it might make me loadsamoney but their aim to be the last retailer standing goes against my core beliefs.

    tmaybaconstangRonnnieOGG1patchythepiratewatto_cobraphilboogieradarthekatlolliver
  • Reply 15 of 30
    As always the only ones who cannot see how impressive it was is the stock market. Down nearly another $5 a share!

    watto_cobra
  • Reply 16 of 30
    Just looked at my AAPL holdings and nearly choked at the size of the drop today, after expecting to see some sort of rise based on after-hours trading yesterday.
    Sell APPL and buy AMZN. They seem to be the sure fire bet to get to $1T first. Personally, I would not be seen dead owning any Amazon stock. Yes it might make me loadsamoney but their aim to be the last retailer standing goes against my core beliefs.

    LOL. You obviously don’t know me or understand my comment. I’ve no immediate plans to sell.
    yojimbo007watto_cobra
  • Reply 17 of 30
    Various reports today are stating that Apple sold less iPhones in the recent holiday quarter than they did a year ago... But as they say in math class, "Do the math." 😉 iPhone sales hit 77.316 million units in Apple’s 91-day Q1 FY 2018 quarter. That compares with 78.29 million sales in the year-ago quarter. You’d imagine those figures meant that sales shrank, but it’s not the case: Last year’s quarter extended over 98 days (14 weeks), while this year Apple saw a more traditional 91-day (13-week) quarter. That means Apple sold around 849,600 iPhones every day in Q1 FY 2018, in contrast to 798,877 iPhones it sold each day across Q1 FY 2017. In other words, Apple sold iPhones in Q1 FY 2018 at a 6.35% FASTER rate than they did in Q1 FY 2017! Or, another way to put it, if this year's 91 day Q1 was equal to the 98 days of last year's Q1, the total count of iPhones sold would be 83,260,800 (Again, 6.35% MORE than last year!). 🤔
    yojimbo007watto_cobraradarthekat
  • Reply 18 of 30

    Various reports today are stating that Apple sold less iPhones in the recent holiday quarter than they did a year ago... But as they say in math class, "Do the math."

    iPhone sales hit 77.316 million units in Apple’s 91-day Q1 FY 2018 quarter. That compares with 78.29 million sales in the year-ago quarter.

    You’d imagine those figures meant that sales shrank, but it’s not the case: Last year’s quarter extended over 98 days (14 weeks), while this year Apple saw a more traditional 91-day (13-week) quarter.

    That means Apple sold around 849,600 iPhones every day in Q1 FY 2018, in contrast to 798,877 iPhones it sold each day across Q1 FY 2017.

    In other words, Apple sold iPhones in Q1 FY 2018 at a 6.35% FASTER rate than they did in Q1 FY 2017!

    Or, another way to put it, if this year's 91 day Q1 was equal to the 98 days of last year's Q1, the total count of iPhones sold would be 83,260,800 (Again, 6.35% MORE than last year!).

    yojimbo007kikkodretrogusto
  • Reply 19 of 30
    Yet the manipulative, dishonorable media.. is reporting this earnings as a disappointment.. and not reporting all the facts.. specially 13 vs 14 weeks..
    its nauseating how dishonest , deceptive  and  unaccountable the media has become . 
    watto_cobraradarthekat
  • Reply 20 of 30
    Could be helpful for an Apple representative or media liaison to attack the bad reporting on this like a pitbull instead of getting steamrolled by the phony stories that are crushing the stock right now. Just sayin'!
    edited February 2 yojimbo007watto_cobra
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