10 ms·

Apple Reports Third Quarter Results

113 points by ucha 9y ago

chollida1 9y ago
Some fun facts from the earnings report and call: What they reported by the numbers: - declared a cash dividend of $0.63 per share of the company’s common stock. The dividend is payable on Aug. 17, 2017 - Revenue: $45.4 billion, up 7% YOY - Adjusted EPS: $1.67, up from $1.42 in Q316 - iPhone units: 41 million sold, up 2% YOY - iPad units: 11.4 million, up 15% YOY - Mac units: 4.3 million, up 1% YOY - Services revenue: $7.3 billion, up 22% YOY - Other Products revenue: $2.7 billion, up 23% YOY - Q4 Forecast: Revenue between $49 and $52 billion - Greater China is Apple's only major region to report a revenue decline -- down 10% from last year's Q3, at just over $8 billion. Greater China also saw a 25% quarter-over-quarter decrease, while the Americas only saw a 4% quarter-over-quarter decline. Where growth is coming from: - Apple says it generated $7.3 billion in revenue on services, which includes the App Store and Apple Music. That's 22% more than the $6 billion in the year-ago quarter. - Apple announces revenue of $2.7 billion from other products, including Apple Watch, Apple Pay and Apple TV. It was $2.2 billion in the year-ago quarter. This represents 23% growth for the category. It's likely that the HomePod will become part of this category in the December quarter.
- ChuckMcM 9y ago
  The iPad Pro 10.5 appears to be a solid upgrade and has many users upgrading. Not a repeatable bump though AFAICT. If you were on the call did they break out the cost of building/moving-into the new HQ? I was trying to guess the chance of a 'down' year when they didn't refresh enough hardware.
  - MBCook 9y ago
    But they ALSO replaced the Air 2 with a really nice device at $330 instead of $500. I'd expect that's far more responsible for the increase than the 10.5" and should continue for a while at least. Edit: according to MacStories iPad revenue is only up 2%. That would fit with a lower profit device being a big part of sales.
    - matwood 9y ago
      > But they ALSO replaced the Air 2 with a really nice device at $330 instead of $500. Yep. And if you watch Best Buy, you can get it on sale even cheaper (~$299). An iPad at that price pushes out almost every contender tablet out there.
      - MBCook 9y ago
        It's too bad the screen isn't quite as nice as the Air 2, but the processor is dramatically better. It really is a fantastic price point.
  - jmull 9y ago
    > Not a repeatable bump though AFAICT. I'd take that action. It looks to me like the iPad is just starting to mature into a full-fledged product.
    - matwood 9y ago
      I agree. iOS11 is going to grow the use case for the iPad.
  - ericabiz 9y ago
    There is massive iPad growth in the small business sector. If you walk into a restaurant these days, it's pretty common to see three or four iPads sitting on the counter. Seems like every service like Amazon Prime Now or GrubHub requires its own iPad. Daycares are also big consumers of iPads that allow parents to see pictures of their kids at school. Many small businesses are now using Square to accept payments, which requires an iPad at every cash register. Technically, for all or most of these purposes, an Android tablet would work equally well. But people still think "iPad" when a tablet is required.
    - coralreef 9y ago
      Interesting. It makes sense that businesses want to be associated with strong brands. Using an lesser known tablet brand at their point of sales / customer interaction tool might make them look cheap.
      - ericabiz 9y ago
        We get a lot of these small business iPads in when they break (I run a chain of computer/phone/tablet repair shops.) When I get a chance to talk with customers, they mostly pick iPad because they know and are comfortable with iOS. Or they literally don't realize there's any other tablet out there--other than Kindle Fire, which in their mind doesn't run small business apps. People associate Kindle Fires with "cheap tablet for their kids." And cheap they are--when they break, it's actually cheaper to buy a new one than to replace a cracked screen on an existing one.
      - mtl_usr 9y ago
        I've met people that were scared of Square as it "didn't look like a genuine POS". I guess using an iPad could make the consumer feel safer. Than again a "Pro" looking case for the Android tablet might also do the trick.
        coralreef 9y ago
        If I didn't know what Square was I'd be suspicious too. Swiping your credit card into a dongle attached to the audio jack of an iPhone/iPad. Seems legit.
- gordon_freeman 9y ago
  Services revenue is now 1/6th of the overall revenue and growing in double digit %. Apple still relies heavily on iPhone revenue but looks like in 5 years their main revenue source can be services. Also I wonder why they do not consider Apply Pay as a part of the services and put it in other product category?
  - pducks32 9y ago
    It could be to obscure the Apple Watch numbers. They don’t want it to be reverse engineered so they hide a sizable and decently appropriate thing in there.
    - matwood 9y ago
      Awhile back, I think was a Cue who said the watch made up a large chunk of this category. It led analysts to, at the time, believe the watch was already a 1B in revenue product. Based on what I'm seeing anecdotally, it's quickly growing.
      - valuearb 9y ago
        Apple Watch did $6B it's first year. They just announced it's doubled sales year over year.
        matwood 9y ago
        Yeah, IIRC this was the first quarter or so it was for sale. Many were claiming it was a flop/failure.
- chvid 9y ago
  Reading the data summary: https://www.apple.com/newsroom/pdfs/Q3FY17DataSummary.pdf https://www.apple.com/newsroom/pdfs/Q3FY17DataSummary.pdf It is a massive drop (~20%) quarter to quarter for all regions except US which is just 4%. Is this an indicator of general downturn, the (former) strong dollar or is it just Apple?
  - icanhackit 9y ago
    Sequential change doesn't tell you the real story because sales are seasonal/coincide with new hardware releases, so it's best to look at quarterly YoY comparisons. Look at the quarterly iPhone sales figures (5th chart) to see what I mean: https://sixcolors.com/post/2017/08/apples-q3-fy17-financial-results/ https://sixcolors.com/post/2017/08/apples-q3-fy17-financial-...
sixQuarks 9y ago
I think they have 5.2 billion shares outstanding, so that means they made close to $9 billion in PROFIT just in this quarter. That's enough to buy Stripe in cash, in just 3 months. Crazy
- mandeepj 9y ago
  They still have lot of outstanding shares even after having an active stock buy back program
- cakedoggie 9y ago
  On a good quarter they will make over $18 billion profit.
ihuman 9y ago
Macstories has some great graphs with the new (and old) data. [0] SixColors also has some graphs, [1] and a transcript of the conference call. [2] [0] https://www.macstories.net/news/apple-q3-2017-results-45-billion-revenue-41-million-iphones-million-11-ipads-sold/ https://www.macstories.net/news/apple-q3-2017-results-45-bil... [1] https://sixcolors.com/post/2017/08/apples-q3-fy17-financial-results/ https://sixcolors.com/post/2017/08/apples-q3-fy17-financial-... [2] https://sixcolors.com/post/2017/08/live-transcript-apple-executives-talk-to-analysts-after-3q17-results/ https://sixcolors.com/post/2017/08/live-transcript-apple-exe...
- Froyoh 9y ago
  Damn those charts are beautiful!
ben174 9y ago
I remember reading somewhere that these results would make it easier to determine when the next iPhone was launching. I wonder what the outcome is there.
- glasshead969 9y ago
  They are forecasting strong revenue for Q4, so odds are there will be some kind of iPhone launch in September. Not sure if it means OLED model launches in September.
  - thefalcon 9y ago
    Talking heads like to say Apple needs major changes and to blow everyone out of the water. Apple knows they just need to keep making incremental changes and keep up with demand and they will [continue to] achieve insane sales.
- AceJohnny2 9y ago
  > make it easier to determine when the next iPhone was launching. You mean it might not be around September 20 like the last 5 generations? (5: 2012-09-21, 5s: 2013-09-20, 6: 2014-09-19, 6s: 2015-09-25, 7: 2016-09-16) The iPhone 4 was 3 weeks later on 2011-10-14. Only the SE was released not released in Fall, on 2016-03-31
  - glasshead969 9y ago
    There was some speculation this year may be delayed because of supply issues with OLED panels.
    - MBCook 9y ago
      The speculation I've heard is that there will be a 7S and 7S+ basically the normal date, with some new high-end "iPhone pro" (the supposed OLED one) that may not be able to ship at the same time and may come out a month or two later.
    - 9y ago
zitterbewegung 9y ago
The TLDR; of the results is that they beat their Q3 estimates. Others have a good summary of their earnings report (or see https://seekingalpha.com/symbol/AAPL/news https://seekingalpha.com/symbol/AAPL/news ) .
nodesocket 9y ago
Once again, the oracle of Omaha got it right. Buffett made a gigantic bet on Apple in January because he saw it being cheap and undervalued. Warren talking about the investment https://www.youtube.com/watch?v=27nxKovluxE https://www.youtube.com/watch?v=27nxKovluxE
- throwaway5752 9y ago
  He also had about the same or more invested in IBM. He's a great investor but not infallible.
  - nodesocket 9y ago
    Yes, but he sold 30% of IBM at around $180ish for what I assume is a nice hefty profit.
    - adventured 9y ago
      His cost basis was $170 [1]. It's a modest profit as a percentage, and he's now close to underwater on his entire investment into IBM due to the drop (the ~$2 billion in dividends he has yielded, may keep him over break-even, unless IBM plunges again). [1] https://www.cnbc.com/2017/01/19/warren-buffetts-ibm-stake-was-in-the-black--briefly.html https://www.cnbc.com/2017/01/19/warren-buffetts-ibm-stake-wa...
      - valuearb 9y ago
        Pretty sure he's not losing sleep over where IBM is today. If he still owns it, he's still bullish on it.
- fulafel 9y ago
  The stock already had a lot of growth expectations priced in, so whether he got it right from today's pov depends on whether these growth numbers are better than his buying price implied.

113 points by ucha 9y ago

Some fun facts from the earnings report and call: What they reported by the numbers: - declared a cash dividend of $0.63 per share of the company’s common stock. The dividend is payable on Aug. 17, 2017 - Revenue: $45.4 billion, up 7% YOY - Adjusted EPS: $1.67, up from $1.42 in Q316 - iPhone units: 41 million sold, up 2% YOY - iPad units: 11.4 million, up 15% YOY - Mac units: 4.3 million, up 1% YOY - Services revenue: $7.3 billion, up 22% YOY - Other Products revenue: $2.7 billion, up 23% YOY - Q4 Forecast: Revenue between $49 and $52 billion - Greater China is Apple's only major region to report a revenue decline -- down 10% from last year's Q3, at just over $8 billion. Greater China also saw a 25% quarter-over-quarter decrease, while the Americas only saw a 4% quarter-over-quarter decline. Where growth is coming from: - Apple says it generated $7.3 billion in revenue on services, which includes the App Store and Apple Music. That's 22% more than the $6 billion in the year-ago quarter. - Apple announces revenue of $2.7 billion from other products, including Apple Watch, Apple Pay and Apple TV. It was $2.2 billion in the year-ago quarter. This represents 23% growth for the category. It's likely that the HomePod will become part of this category in the December quarter.

ChuckMcM 9y ago
The iPad Pro 10.5 appears to be a solid upgrade and has many users upgrading. Not a repeatable bump though AFAICT. If you were on the call did they break out the cost of building/moving-into the new HQ? I was trying to guess the chance of a 'down' year when they didn't refresh enough hardware.
- MBCook 9y ago
  But they ALSO replaced the Air 2 with a really nice device at $330 instead of $500. I'd expect that's far more responsible for the increase than the 10.5" and should continue for a while at least. Edit: according to MacStories iPad revenue is only up 2%. That would fit with a lower profit device being a big part of sales.
  - matwood 9y ago
    > But they ALSO replaced the Air 2 with a really nice device at $330 instead of $500. Yep. And if you watch Best Buy, you can get it on sale even cheaper (~$299). An iPad at that price pushes out almost every contender tablet out there.
    - MBCook 9y ago
      It's too bad the screen isn't quite as nice as the Air 2, but the processor is dramatically better. It really is a fantastic price point.
- jmull 9y ago
  > Not a repeatable bump though AFAICT. I'd take that action. It looks to me like the iPad is just starting to mature into a full-fledged product.
  - matwood 9y ago
    I agree. iOS11 is going to grow the use case for the iPad.
- ericabiz 9y ago
  There is massive iPad growth in the small business sector. If you walk into a restaurant these days, it's pretty common to see three or four iPads sitting on the counter. Seems like every service like Amazon Prime Now or GrubHub requires its own iPad. Daycares are also big consumers of iPads that allow parents to see pictures of their kids at school. Many small businesses are now using Square to accept payments, which requires an iPad at every cash register. Technically, for all or most of these purposes, an Android tablet would work equally well. But people still think "iPad" when a tablet is required.
  - coralreef 9y ago
    Interesting. It makes sense that businesses want to be associated with strong brands. Using an lesser known tablet brand at their point of sales / customer interaction tool might make them look cheap.
    - ericabiz 9y ago
      We get a lot of these small business iPads in when they break (I run a chain of computer/phone/tablet repair shops.) When I get a chance to talk with customers, they mostly pick iPad because they know and are comfortable with iOS. Or they literally don't realize there's any other tablet out there--other than Kindle Fire, which in their mind doesn't run small business apps. People associate Kindle Fires with "cheap tablet for their kids." And cheap they are--when they break, it's actually cheaper to buy a new one than to replace a cracked screen on an existing one.
    - mtl_usr 9y ago
      I've met people that were scared of Square as it "didn't look like a genuine POS". I guess using an iPad could make the consumer feel safer. Than again a "Pro" looking case for the Android tablet might also do the trick.
      - coralreef 9y ago
        If I didn't know what Square was I'd be suspicious too. Swiping your credit card into a dongle attached to the audio jack of an iPhone/iPad. Seems legit.
gordon_freeman 9y ago
Services revenue is now 1/6th of the overall revenue and growing in double digit %. Apple still relies heavily on iPhone revenue but looks like in 5 years their main revenue source can be services. Also I wonder why they do not consider Apply Pay as a part of the services and put it in other product category?
- pducks32 9y ago
  It could be to obscure the Apple Watch numbers. They don’t want it to be reverse engineered so they hide a sizable and decently appropriate thing in there.
  - matwood 9y ago
    Awhile back, I think was a Cue who said the watch made up a large chunk of this category. It led analysts to, at the time, believe the watch was already a 1B in revenue product. Based on what I'm seeing anecdotally, it's quickly growing.
    - valuearb 9y ago
      Apple Watch did $6B it's first year. They just announced it's doubled sales year over year.
      - matwood 9y ago
        Yeah, IIRC this was the first quarter or so it was for sale. Many were claiming it was a flop/failure.
chvid 9y ago
Reading the data summary: https://www.apple.com/newsroom/pdfs/Q3FY17DataSummary.pdf https://www.apple.com/newsroom/pdfs/Q3FY17DataSummary.pdf It is a massive drop (~20%) quarter to quarter for all regions except US which is just 4%. Is this an indicator of general downturn, the (former) strong dollar or is it just Apple?
- icanhackit 9y ago
  Sequential change doesn't tell you the real story because sales are seasonal/coincide with new hardware releases, so it's best to look at quarterly YoY comparisons. Look at the quarterly iPhone sales figures (5th chart) to see what I mean: https://sixcolors.com/post/2017/08/apples-q3-fy17-financial-results/ https://sixcolors.com/post/2017/08/apples-q3-fy17-financial-...

sixQuarks 9y ago

I think they have 5.2 billion shares outstanding, so that means they made close to $9 billion in PROFIT just in this quarter. That's enough to buy Stripe in cash, in just 3 months. Crazy

mandeepj 9y ago
They still have lot of outstanding shares even after having an active stock buy back program
cakedoggie 9y ago
On a good quarter they will make over $18 billion profit.

ihuman 9y ago

Macstories has some great graphs with the new (and old) data. [0] SixColors also has some graphs, [1] and a transcript of the conference call. [2] [0] https://www.macstories.net/news/apple-q3-2017-results-45-billion-revenue-41-million-iphones-million-11-ipads-sold/ https://www.macstories.net/news/apple-q3-2017-results-45-bil... [1] https://sixcolors.com/post/2017/08/apples-q3-fy17-financial-results/ https://sixcolors.com/post/2017/08/apples-q3-fy17-financial-... [2] https://sixcolors.com/post/2017/08/live-transcript-apple-executives-talk-to-analysts-after-3q17-results/ https://sixcolors.com/post/2017/08/live-transcript-apple-exe...

Froyoh 9y ago
Damn those charts are beautiful!

ben174 9y ago

I remember reading somewhere that these results would make it easier to determine when the next iPhone was launching. I wonder what the outcome is there.

glasshead969 9y ago
They are forecasting strong revenue for Q4, so odds are there will be some kind of iPhone launch in September. Not sure if it means OLED model launches in September.
- thefalcon 9y ago
  Talking heads like to say Apple needs major changes and to blow everyone out of the water. Apple knows they just need to keep making incremental changes and keep up with demand and they will [continue to] achieve insane sales.
AceJohnny2 9y ago
> make it easier to determine when the next iPhone was launching. You mean it might not be around September 20 like the last 5 generations? (5: 2012-09-21, 5s: 2013-09-20, 6: 2014-09-19, 6s: 2015-09-25, 7: 2016-09-16) The iPhone 4 was 3 weeks later on 2011-10-14. Only the SE was released not released in Fall, on 2016-03-31
- glasshead969 9y ago
  There was some speculation this year may be delayed because of supply issues with OLED panels.
  - MBCook 9y ago
    The speculation I've heard is that there will be a 7S and 7S+ basically the normal date, with some new high-end "iPhone pro" (the supposed OLED one) that may not be able to ship at the same time and may come out a month or two later.
  - 9y ago

zitterbewegung 9y ago

The TLDR; of the results is that they beat their Q3 estimates. Others have a good summary of their earnings report (or see https://seekingalpha.com/symbol/AAPL/news https://seekingalpha.com/symbol/AAPL/news ) .

nodesocket 9y ago

Once again, the oracle of Omaha got it right. Buffett made a gigantic bet on Apple in January because he saw it being cheap and undervalued. Warren talking about the investment https://www.youtube.com/watch?v=27nxKovluxE https://www.youtube.com/watch?v=27nxKovluxE

throwaway5752 9y ago
He also had about the same or more invested in IBM. He's a great investor but not infallible.
- nodesocket 9y ago
  Yes, but he sold 30% of IBM at around $180ish for what I assume is a nice hefty profit.
  - adventured 9y ago
    His cost basis was $170 [1]. It's a modest profit as a percentage, and he's now close to underwater on his entire investment into IBM due to the drop (the ~$2 billion in dividends he has yielded, may keep him over break-even, unless IBM plunges again). [1] https://www.cnbc.com/2017/01/19/warren-buffetts-ibm-stake-was-in-the-black--briefly.html https://www.cnbc.com/2017/01/19/warren-buffetts-ibm-stake-wa...
    - valuearb 9y ago
      Pretty sure he's not losing sleep over where IBM is today. If he still owns it, he's still bullish on it.
fulafel 9y ago
The stock already had a lot of growth expectations priced in, so whether he got it right from today's pov depends on whether these growth numbers are better than his buying price implied.