Apple earns record $64B in fourth quarter as services soar to $12.5B
Apple's revenue for the fourth quarter of the fiscal year 2019 hit $64 billion, the company revealed on Tuesday, with earnings-per-share of $3.03, making it the biggest iPhone release quarter yet.
The iPhone earned Apple $33.36B, down 9% from the year-over-year quarter's revenue of $37.2 billion. The iPhone 11 and iPhone 11 Pro were available for about two weeks of the period.
A year ago, the Services arm of the company contributed $10 billion in revenue, with $8.5 billion the year before that. Services continues to report double-digit year-on-year growth with $12.51 billion, up 18%, keeping it a relatively predictable revenue source for the company. Apple told Reuters some 450 million users now subscribe to first- and third-party services across its various hardware platforms.
"We concluded a groundbreaking fiscal 2019 with our highest Q4 revenue ever, fueled by accelerating growth from Services, Wearables and iPad," said Apple CEO Tim Cook. "With customers and reviewers raving about the new generation of iPhones, today's debut of new, noise-cancelling AirPods Pro, the hotly-anticipated arrival of Apple TV+ just two days away, and our best lineup of products and services ever, we're very optimistic about what the holiday quarter has in store."
The new seventh generation iPad Air had similar availability. The iPad helped earned Apple $4.66 billion in revenue for the quarter, up year-on-year from last year's $4.1 billion.
Apple launched new MacBook Air and MacBook Pro lines in July, with availability through most of the quarter of both. Apple generated Mac revenue of $6.99 billion for the quarter. That's below the year-ago quarter's $7.4 billion.
Wearables also rose significantly over the quarter, with Apple reporting a 54% uptick year-over-year to end quarter four at $6.52 billion.
Overall revenue in the quarter of $64 billion billion is a year-on-year increase from $62.9 billion. Apple's forecast in the third-quarter results has the company reaching revenue of between $61 billion and $64 billion in the fourth quarter, with a gross margin between 37.5% and 38.5%. Wall Street was expecting $62.9 billion for the quarter.
Apple is forecasting revenue between $85.5 billion and $89.5 billion for the first fiscal quarter of 2020, with gross margin pegged between 37.5% and 38.5%. Operating expenses are expected to lie between $9.6 billion and $9.8 billion, while a tax rate of approximately 16.5% is anticipated.
As Apple's current policy is to provide revenue for product categories without unit figures, analysts will rely on sales figures from other sources to try and determine statistics like the product mix and average selling price for the iPhone. The conference call following this earnings report is typically the biggest opportunity for Apple to provide extra detail on its sales, and it is likely to offer some indicator for its new iPhone range's sales volumes at this early stage.
The iPhone earned Apple $33.36B, down 9% from the year-over-year quarter's revenue of $37.2 billion. The iPhone 11 and iPhone 11 Pro were available for about two weeks of the period.
A year ago, the Services arm of the company contributed $10 billion in revenue, with $8.5 billion the year before that. Services continues to report double-digit year-on-year growth with $12.51 billion, up 18%, keeping it a relatively predictable revenue source for the company. Apple told Reuters some 450 million users now subscribe to first- and third-party services across its various hardware platforms.
"We concluded a groundbreaking fiscal 2019 with our highest Q4 revenue ever, fueled by accelerating growth from Services, Wearables and iPad," said Apple CEO Tim Cook. "With customers and reviewers raving about the new generation of iPhones, today's debut of new, noise-cancelling AirPods Pro, the hotly-anticipated arrival of Apple TV+ just two days away, and our best lineup of products and services ever, we're very optimistic about what the holiday quarter has in store."
The new seventh generation iPad Air had similar availability. The iPad helped earned Apple $4.66 billion in revenue for the quarter, up year-on-year from last year's $4.1 billion.
Apple launched new MacBook Air and MacBook Pro lines in July, with availability through most of the quarter of both. Apple generated Mac revenue of $6.99 billion for the quarter. That's below the year-ago quarter's $7.4 billion.
Wearables also rose significantly over the quarter, with Apple reporting a 54% uptick year-over-year to end quarter four at $6.52 billion.
Overall revenue in the quarter of $64 billion billion is a year-on-year increase from $62.9 billion. Apple's forecast in the third-quarter results has the company reaching revenue of between $61 billion and $64 billion in the fourth quarter, with a gross margin between 37.5% and 38.5%. Wall Street was expecting $62.9 billion for the quarter.
Apple is forecasting revenue between $85.5 billion and $89.5 billion for the first fiscal quarter of 2020, with gross margin pegged between 37.5% and 38.5%. Operating expenses are expected to lie between $9.6 billion and $9.8 billion, while a tax rate of approximately 16.5% is anticipated.
As Apple's current policy is to provide revenue for product categories without unit figures, analysts will rely on sales figures from other sources to try and determine statistics like the product mix and average selling price for the iPhone. The conference call following this earnings report is typically the biggest opportunity for Apple to provide extra detail on its sales, and it is likely to offer some indicator for its new iPhone range's sales volumes at this early stage.
Comments
Happy to to eat some very fine crow!
iPhone was down nearly 10% YoY.
The blowout quarter is next up and might prove to be a turnaround moment but even then, it will be a hard slog through to the iPhone 12 (and 5G).
I'm guessing China has left a gaping hole in handset revenues.
Services is the real winner here! Remember almost everyone was using their free Arcade trial and TV+ hasn't rolled out. This leads me to believe either a lot of new users purchased AppleCare or News+ isn't doing as bad as analysts think.
Now take in the fact Arcade and TV+ revenue will be bundled in next quarters revenue.
edit: As expected. After the holiday quarter we'll likely get a bump.
Now they keep setting records despite the lengthening phone replacement cycle by growing EVERY OTHER SEGMENT of their business and it’s still “Future disaster is inevitable.”
Keep paddling up river. Surely you will find the ocean soon!
In fact, this is actually good news for the 12, because it creates less of a hurdle to leap in 2020 with respect to unit sales. Moreover, anything that makes Apple pivot with merely a moderate financial impact resulting from the iPhone (and even more so, China) being a smaller and smaller portion of their revenue is great news for the company.
Clearly, their game now is in services (which will be far less dependent on China), and that is a far bigger issue for the market.
@neilcybart on twitter:
I say it is "unpossible".
https://www.urbandictionary.com/define.php?term=Unpossible
Unpossible, that which can’t be done just yet.
I'd surmise that Apple is generating more profit from wearables than Huawei is from all of its phone sales, but frankly, due to Huawei's low margins, that's a safe bet.