Apple earns record $64B in fourth quarter as services soar to $12.5B

Posted:
in AAPL Investors edited October 2019
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.
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Comments

  • Reply 1 of 76
    It's quite stunning how well Cook & Co. have executed. Absolutely stunning. I was among those who were worried some months ago, when it became clear that Apple had no clear strategy for 5G in 2019, but I was 100% wrong about the remarkable success of the iPhone 11/Pro/Pro Max.

    Happy to to eat some very fine crow!
    AppleExposedmatrix077dewmeiqatedojahbladeroundaboutnowThrashmanMacQcequality72521watto_cobra
  • Reply 2 of 76
    Outstanding share count was reduced by more than 88 million during the quarter, at a cost of less than $18 billion.
    Thrashmanwatto_cobra
  • Reply 3 of 76
    melgrossmelgross Posts: 33,285member
    Apple had a more difficult early year, due to trade difficulties and the administrations fight with Huawei, arresting the CFO, and daughter of the company’s founder, which lead to a temporary boycott of Apple products. Hopefully all of this will straighten out before too long. This quarter’s revenue isn’t hit much by the new phones, but the current one will.
    AppleExposedtmaybaconstangmacplusplusjahbladebakedbananas
  • Reply 4 of 76
    avon b7avon b7 Posts: 6,300member
    You might want to save that fine crow for New Year.

    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.
    edited October 2019 chemengin1
  • Reply 5 of 76
    It's quite stunning how well Cook & Co. have executed. Absolutely stunning. I was among those who were worried some months ago, when it became clear that Apple had no clear strategy for 5G in 2019, but I was 100% wrong about the remarkable success of the iPhone 11/Pro/Pro Max.

    Happy to to eat some very fine crow!
    What you're wrong about is the fabricated importance of 5G drumbeat by the likes of ATT, Verizon, T-Mible, Cisco, etc. They need a next generation to avoid being a dividend only investment.
    AppleExposedmatrix077lkrupppujones1StrangeDaysbaconstangcy_starkmantmayjahbladetht
  • Reply 6 of 76
    avon b7 said:
    You might want to save that fine crow for New Year.

    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.
    I'm guessing you don't realize India is a huge new market.
    AppleExposedtmaybaconstangjahbladebakedbananasequality72521watto_cobra
  • Reply 7 of 76
    avon b7 said:
    You might want to save that fine crow for New Year.

    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.
    Down 2% yoy (total revenue) in China. Not bad considering the headwinds. But obv Apple is doomed. 
    AppleExposedJWSCcornchipStrangeDaystmaybaconstangjahbladebakedbananasbrucemcwatto_cobra
  • Reply 8 of 76
    AppleExposedAppleExposed Posts: 1,805unconfirmed, member
    Another record quarter?! WOW. How many record quarters can Apple announce? Tim's tongue must feel sore every time he says "record quarter".

    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.

    bakedbananaswatto_cobra
  • Reply 9 of 76
    SoliSoli Posts: 10,033member
    🙌 When's the next dividend payment date? Daddy needs a new airplane!


    edit: As expected. After the holiday quarter we'll likely get a bump.
    Apple’s board of directors has declared a cash dividend of $0.77 per share of the Company’s common stock. The dividend is payable on November 14, 2019 to shareholders of record as of the close of business on November 11, 2019.
    edited October 2019 watto_cobra
  • Reply 10 of 76
    bageljoeybageljoey Posts: 1,972member
    avon b7 said:
    You might want to save that fine crow for New Year.

    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.
    LOL. Remember not so many quarters ago people like you said “Sure, another record quarter.  BUT they are too reliant on the iPhone. Future disaster is inevitable if they can’t diversify!!!”

    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!
    StrangeDaysbaconstangfastasleepAppleExposedthtroundaboutnowbakedbananaswatto_cobra
  • Reply 11 of 76
    avon b7 said:
    You might want to save that fine crow for New Year.

    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.
    You don't get it. It was more-than-fully factored in to the company's performance (hence the stock price), and actually outperformed expectations.

    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.
    iqatedowatto_cobra
  • Reply 12 of 76
    avon b7 said:
    You might want to save that fine crow for New Year.

    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.
    https://twitter.com/neilcybart/status/1189653658708910098?s=21 

    For those to lazy to click the link:

    @neilcybart on twitter:
    ‘Apple CFO Luca Maestri on iPhone: 

    Active installed base of iPhone grew to all-time highs in each geographical segment. 

    A big hole in the "iPhone users are switching to Huawei in China" narrative.
    SpamSandwichmacplusplusfastasleepAppleExposedthtwatto_cobra
  • Reply 13 of 76
    StrangeDaysStrangeDays Posts: 12,123member
    avon b7 said:
    You might want to save that fine crow for New Year.

    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.
    Squawk, squawk. Yes, we all know the days of infinite iphone growth have peaked, and it doesn’t matter. No one claimed iPhone would or even could grow forever. Even still, it’s been the most successful smartphone in history. YoY iPhone may be down, but other products are up, services are up. For years people said the insane revenue of iPhone was a liability, now there is diversity, and surprise! The Downer Choir is still trying to suggest things aren’t well at Apple. 
    edited October 2019 baconstangtmaymacplusplusfastasleepgilly33AppleExposedbakedbananaswatto_cobra
  • Reply 14 of 76
    tmaytmay Posts: 5,731member
    avon b7 said:
    You might want to save that fine crow for New Year.

    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.
    Your post is just so sad, that I don't even have the desire to mock you.
    edited October 2019 matrix077StrangeDaysfastasleepAppleExposedRonnnieOroundaboutnowLukeCagewatto_cobra
  • Reply 15 of 76
    No big surprise that iPhone sales are down YoY. Most users are on a 3-4 year upgrade cycle as opposed to a 2-3 year upgrade cycle. As the market for smartphones matures, innovation slows down and product lifecycles lengthen. This is why Apple's growth needs to come from other areas. It was never a good idea for iPhone sales to be ~70% of Apple's revenue. Overall, a solid quarter...
    AppleExposedwatto_cobra
  • Reply 16 of 76
    j.travaultraj.travaultra Posts: 2unconfirmed, member
    This is the most important news, business model of apple is changing... I think the biggest income for Apple could be from services in the near future (biggest than from hardware). For stockholders (who understood what is happening) is it great news, because there is a lot of positives.... I bought stocks when sales of iPhone fell down and 99/100 articles from economist experts describing situation of apple was totally out (thanks this, stocks dropped down - who was clever can earn a lot of money.)
    AppleExposedwatto_cobra
  • Reply 17 of 76
    tmaytmay Posts: 5,731member
    This is the most important news, business model of apple is changing... I think the biggest income for Apple could be from services in the near future (biggest than from hardware). For stockholders (who understood what is happening) is it great news, because there is a lot of positives.... I bought stocks when sales of iPhone fell down and 99/100 articles from economist experts describing situation of apple was totally out (thanks this, stocks dropped down - who was clever can earn a lot of money.)
    There is this belief, by many analysts, that it will be "impossible" for Apple to create another disruption like the iPhone.

    I say it is "unpossible".

    https://www.urbandictionary.com/define.php?term=Unpossible

    Unpossible, that which can’t be done just yet.
    gilly33watto_cobra
  • Reply 18 of 76
    tmaytmay Posts: 5,731member

    avon b7 said:
    You might want to save that fine crow for New Year.

    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.
    Squawk, squawk. Yes, we all know the days of infinite iphone growth have peaked, and it doesn’t matter. No one claimed iPhone would or even could grow forever. Even still, it’s been the most successful smartphone in history. YoY iPhone may be down, but other products are up, services are up. For years people said the insane revenue of iPhone was a liability, now there is diversity, and surprise! The Downer Choir is still trying to suggest things aren’t well at Apple. 
    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.
    SoliStrangeDaysAppleExposedanantksundaramwatto_cobra
  • Reply 19 of 76
    Well according to the CPI inflation calculator the rate of inflation from 2018 to 2019 was 2% so revenue was flat.
  • Reply 20 of 76
    flydogflydog Posts: 1,094member
    avon b7 said:
    You might want to save that fine crow for New Year.

    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.
    I'm guessing you don't realize India is a huge new market.
    Apple's share of the India market is barely 1%, so no, not huge. 
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