6 ms·

Apple Financial Results – Q1 2019 Conference Call LIVE

57 points by ahakki 8y ago

chollida1 8y ago
Notes..... Pre Release: - first time since 2001 that Apple will report a decline in its most critical quarter - Options showing an implied 5.6% one-day change. - Slightly higher than the average move of 4.4% following the last eight releases - Shares traded down on day on average volume - Market Cap is now below AMZN, GOOG, and MSFT Numbers: - cash on hand(net not gross) $130 Billion - 1Q EPS $4.18, Est. $4.17 - 1Q Rev. $84.3B, Est. $83.97B - 1Q Service Rev. $10.88B - 1Q China Rev. $13.17B down big from $17.9 last year Revenue by Product: - iPhone: $52 billion - Services: $10.9 billion - Mac: $7.4 billion - Wearables/Home/Accessories: $7.3 billion (up from 5.5 billion last year) - iPad: $6.7 billion - reportedly returned $13 billion via buy backs and dividends last quarter Forward Numbers: - 2Q Rev. $55B to $59B, Est. $58.97B Misc: - suppliers up slightly - North America grew revenues. - user base is at 1.4 billion, impressive that they rival FB in metrics like this when FB is free and iPhones are most decidedly not.
- hi5eyes 8y ago
  $13 billion in revenue from China last quarter, down 27% from a year ago https://www.cnbc.com/2019/01/29/apple-china-revenue-q1-2019.html https://www.cnbc.com/2019/01/29/apple-china-revenue-q1-2019....
  - std_throwawayay 8y ago
    Do we have any reliable information if this is just Apple or if Chinese consumption is down across the board?
    - erik 8y ago
      Nvidia also reported Chinese consumer consumption being down in their results.
    - blackoil 8y ago
      As per [1] overall Chinese smartphone market is down 11%. Huawei seems to be doing good in China, Xiaomi/Oppo may have seen some decline in China but they made up for that in India where Apple is negligible. [1] https://www.strategyanalytics.com/zh/strategy-analytics/blogs/devices/handset-country-share/handset-country-share/2019/01/24/china-smartphone-shipments-fell-11-in-q4-2018 https://www.strategyanalytics.com/zh/strategy-analytics/blog...
    - GeekyBear 8y ago
      Across the board. >DONGGUAN, China — China’s consumers and businesses are losing confidence. Car sales have plunged. The housing market is stumbling. Some factories are letting workers off for the big Lunar New Year holiday two months early. https://www.nytimes.com/2018/12/14/business/china-economy-xi-jinping.html https://www.nytimes.com/2018/12/14/business/china-economy-xi...
    - cronix 8y ago
      They are all down (their economy in general), but there is also a concerted effort by some in China to not use Apple products, especially after the Huawei incident. > Chinese companies are now threatening employees by demanding they not purchase any Apple products whatsoever, going so far to withhold bonuses, garnish wages or even terminate an uncooperative employee.[1] [1] https://9to5mac.com/2018/12/24/huawei-iphone-termination-apple/ https://9to5mac.com/2018/12/24/huawei-iphone-termination-app... The Chinese courts also blocked iphone sales in China over Qualcomm. My understanding is the newest line of phones weren't affected (they used intel modems), but it affected the older models - which are obviously cheaper and more attractive to the avg. Chinese person compared to the $1,000+ flagships. Both might not be huge factors in themselves, but probably contributed to Apples decline more than the other brands. It wasn't a proportionate decline across all brands. Apple was hit harder.
      - GeekyBear 8y ago
        >The Chinese courts also blocked iphone sales in China over Qualcomm. My understanding is the newest line of phones weren't affected (they used intel modems The Qualcomm patents in the China suit were software patents unrelated to cellular modems. >The patents allow users to edit and resize photos and manage apps by using a touchscreen, according to the lawsuit. https://observer.com/2018/12/qualcomm-lawsuit-iphone-ban-china-apple/ https://observer.com/2018/12/qualcomm-lawsuit-iphone-ban-chi... Apple has already issued a patch with a software workaround. You may be thinking about the case in Germany.
    - adventured 8y ago
      Samsung is seeing the same hit out of China. Jan 8 "Samsung said fourth quarter profits would likely come in at around 10.8 trillion Korean won ($9.67 billion), well shy of the market consensus of 13.2 trillion won, with sales falling 11% to 59 trillion won. Samsung only has a 1% share of the China handset market, compared to around 9% for Apple, but its chips and screens make their way into handsets made by Huawei Technologies, as well as Apple's iPhones, and that segment comprises a much larger portion of its operating profits" https://www.thestreet.com/investing/stocks/apple-v-samsung-china-slowdown-hits-smartphone-giants-but-not-equally-14827288 https://www.thestreet.com/investing/stocks/apple-v-samsung-c...
- BartBoch 8y ago
  1,4 billion user-base? I wonder how they calculate this. It looks like non-unique users (devices connected). Or maybe lifetime accounts number.
  - saagarjha 8y ago
    I believe it's the number of unique devices that connect to one of their services in a month, or something similar to that.
    - gdilla 8y ago
      That wouldn't be a user base though. People have N apple devices each. Could be unique appleIDs to use the appstores.
      - saagarjha 8y ago
        Since you need an Apple ID to access their services, I'm sure it's easy to deduplicate users.
  - ahakki 8y ago
    According to Tim Cook on the earnings call he called it "active install base". Make of that what you will.
    - tqkxzugoaupvwqr 8y ago
      Sounds like actively used devices. Which means the number of users is lower as some/many people use more than one Apple device.
  - pmontra 8y ago
    Are they counting iTunes on Windows?
    - cm2187 8y ago
      Well, he didn't say happy users.
deleted 8y ago
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mudil 8y ago
Apple discloses Services margin for the first time and it was 62.8%!
- ariwilson 8y ago
  Well, yeah, taking money from Google for positioning does tend to have pretty high margins...
- beerlord 8y ago
  This is what they need to cut if they want to sell phones. Get people gaming on iOS devices and they will buy the latest and greatest hardware to get the best experience. But if all you can play are casual games, your experience can get no better. Take a page out of Epic and Valve's book: - Cut commissions to 12% for app store purchases - Find a way to promote full-priced games, and demote free-to-play - Offer one good free game every fortnight to your entire customer base - Allow refunds within two weeks and if under 2 hours played - Sell an official Apple game controller - Offer centralised Achievements and friends - Sign up exclusive deals with the best studios - Discourage games from supporting older versions of iOS. Deprecate the iPhone 5S in iOS 13 so that developers no longer have to support that unique screen. - Focus more on battery life (including bigger batteries) to allow longer content sessions
  - votepaunchy 8y ago
    The 5s has the same screen as the SE.
joering2 8y ago
Stock up 5% after hours on Cook news.
- deleted 8y ago
  [deleted]
scarface74 8y ago
Let’s look at the numbers and compare it to the HN narratives. https://sixcolors.com/post/2019/01/apples-dramatic-q1-2019-results/ https://sixcolors.com/post/2019/01/apples-dramatic-q1-2019-r... 1. People are abandoning Macs: Revenue for the Mac is tied for its highest quarter ever. 2. The Apple Watch is a failure/AirPods and abandoning the headphone jack is hurting Apple: Wearable and home accessories are higher than ever. 3. Apple made a mistake by raising iPhone prices: Despite Apple’s missing its revenue predictions. This is still it’s 2nd most profitable quarter ever. It’s only under its most profitable quarter by around $100 Million.
- Apocryphon 8y ago
  Looks like a significant drop in iPhone YoY revenue.
  - scarface74 8y ago
    That’s true. But if they made up for it by focusing on services, isn’t that the sign of a well run company? No one derided them when iPod sales declined and the iPhone was growing. That would also be like critizing Netflix’s cratering DVD business while ignoring their streaming service.
- Someone1234 8y ago
  > compare it to the HN narratives Seems like you constructed a strawman to knock down. This site contains diverse opinions that you'd find in any community of large enough size. PS - The graphs are very attractive, but it is unclear if they're inflation adjusted. $6.9B in Q1 2015 Mac Revenue dollars is worth $7.42B in 2019 dollars.
  - scarface74 8y ago
    No one does inflation adjusted year over year comparisons.
    - Someone1234 8y ago
DVassallo 8y ago
A 15% drop in iPhone sales, but net income stayed the same. ~$60B in net income in the last 12 months, and the market cap minus shareholders' equity is now ~$610B. Apple could afford to pay a 10% dividend (on the share price ex shareholders' equity) just from its earnings, without touching cash. And that's with iPhone sales dropping 15%.
- umeshunni 8y ago
  > net income stayed the same the WSJ article says it was helped by a tax rate that declined to 16.5% from 26% a year earlier prior to the 2017 tax overhaul.
- adventured 8y ago
  The operating income shows the income drop that the big tax rate change (which won't repeat next year) is helping to soften in the net income figure. A decline from $26.2b to $23.3b, or 11%.
  - DVassallo 8y ago
    True. Still, the argument that AAPL is undervalued still stands even if they did $55b in net income next year. Or $50b.
cinquemb 8y ago
What I want to know, how many SE's did they sell in the past week to beat EPS by a cent?
theredbox 8y ago
Is a company like Apple actually any good for world’s economy ? They seem to be hoarding too much cash without spending any significant portion of it. I dont care about companies earning money however i care if they dont invest back.
- Despegar 8y ago
  They return their cash to shareholders via dividends and share buybacks, letting those investors allocate it to wherever they expect better returns. Apple doesn't need to become a conglomerate or start a corporate VC arm themselves.
  - cwyers 8y ago
    No, they don't, apparently. According to the top post in the thread, they have $130 billion in cash on hand.
    - bunnycorn 8y ago
      That's nothing. They had a profit of $100 billion last fiscal year. It's the same as someone having 15.6 salaries in their bank account (not counting for the loans).
- jldugger 8y ago
  Do companies physically warehouse cash? No, they deposit it in the banking system, or buy treasuries with it, right? It's being invested in the world economy, just not directly.
  - gumby 8y ago
    True, but what about cash in excess of what you need to keep for operations? You’ll want to put a reserve in something safe, like treasuries. You’ll want to invest some in somethingnhigher Heike for opportunistic needs, like an acquisition or, in Apple’s case, locking in pricing with suppliers (most companies can’t afford that). But if you have more than that? Might as well return to shareholders since they aren’t investing in you for your stock market prowess, but for your computer manufacturing and sales prowess. Apple had a problem for a while with that middle category: they were the fastest growing large cap stock so there wasn’t anything better than their own stock to buy. This is an interesting problem to have. Imho they still should have paid out more dividends, but what they did was probably more tax advantageous.
smaili 8y ago
Couple of interesting tidbits: * Calling out challenges with China's App Store on app game approval. * Appreciation of dollar on international markets. * Subsidized iPhones are making people less incentivized on purchasing a new phone.
bunnycorn 8y ago
AHAH, I'm rich now, I bought shares this Monday (lot's of them, for what money I had), because I know no matter what happens (Apple hit on point their revised estimate of $84B), their stock was completely under-appreciated. I'm going to sell this when the new iPhones come out next September, because it's always the same game every year. People, it's free money, don't believe me? https://www.youtube.com/watch?v=wwHlKbfX_0Y https://www.youtube.com/watch?v=wwHlKbfX_0Y This video was made last year!
- mmmmmmmmm 8y ago
  Did you buy on margin? Otherwise I don't see how you could get rich from a 6% jump in the stock price.
- pertymcpert 8y ago
  Why didn't you buy call options instead if you're so sure? Could make a lot more.
deleted 8y ago
[deleted]

57 points by ahakki 8y ago

Notes..... Pre Release: - first time since 2001 that Apple will report a decline in its most critical quarter - Options showing an implied 5.6% one-day change. - Slightly higher than the average move of 4.4% following the last eight releases - Shares traded down on day on average volume - Market Cap is now below AMZN, GOOG, and MSFT Numbers: - cash on hand(net not gross) $130 Billion - 1Q EPS $4.18, Est. $4.17 - 1Q Rev. $84.3B, Est. $83.97B - 1Q Service Rev. $10.88B - 1Q China Rev. $13.17B down big from $17.9 last year Revenue by Product: - iPhone: $52 billion - Services: $10.9 billion - Mac: $7.4 billion - Wearables/Home/Accessories: $7.3 billion (up from 5.5 billion last year) - iPad: $6.7 billion - reportedly returned $13 billion via buy backs and dividends last quarter Forward Numbers: - 2Q Rev. $55B to $59B, Est. $58.97B Misc: - suppliers up slightly - North America grew revenues. - user base is at 1.4 billion, impressive that they rival FB in metrics like this when FB is free and iPhones are most decidedly not.

hi5eyes 8y ago
$13 billion in revenue from China last quarter, down 27% from a year ago https://www.cnbc.com/2019/01/29/apple-china-revenue-q1-2019.html https://www.cnbc.com/2019/01/29/apple-china-revenue-q1-2019....
- std_throwawayay 8y ago
  Do we have any reliable information if this is just Apple or if Chinese consumption is down across the board?
  - erik 8y ago
    Nvidia also reported Chinese consumer consumption being down in their results.
  - blackoil 8y ago
    As per [1] overall Chinese smartphone market is down 11%. Huawei seems to be doing good in China, Xiaomi/Oppo may have seen some decline in China but they made up for that in India where Apple is negligible. [1] https://www.strategyanalytics.com/zh/strategy-analytics/blogs/devices/handset-country-share/handset-country-share/2019/01/24/china-smartphone-shipments-fell-11-in-q4-2018 https://www.strategyanalytics.com/zh/strategy-analytics/blog...
  - GeekyBear 8y ago
    Across the board. >DONGGUAN, China — China’s consumers and businesses are losing confidence. Car sales have plunged. The housing market is stumbling. Some factories are letting workers off for the big Lunar New Year holiday two months early. https://www.nytimes.com/2018/12/14/business/china-economy-xi-jinping.html https://www.nytimes.com/2018/12/14/business/china-economy-xi...
  - cronix 8y ago
    They are all down (their economy in general), but there is also a concerted effort by some in China to not use Apple products, especially after the Huawei incident. > Chinese companies are now threatening employees by demanding they not purchase any Apple products whatsoever, going so far to withhold bonuses, garnish wages or even terminate an uncooperative employee.[1] [1] https://9to5mac.com/2018/12/24/huawei-iphone-termination-apple/ https://9to5mac.com/2018/12/24/huawei-iphone-termination-app... The Chinese courts also blocked iphone sales in China over Qualcomm. My understanding is the newest line of phones weren't affected (they used intel modems), but it affected the older models - which are obviously cheaper and more attractive to the avg. Chinese person compared to the $1,000+ flagships. Both might not be huge factors in themselves, but probably contributed to Apples decline more than the other brands. It wasn't a proportionate decline across all brands. Apple was hit harder.
    - GeekyBear 8y ago
      >The Chinese courts also blocked iphone sales in China over Qualcomm. My understanding is the newest line of phones weren't affected (they used intel modems The Qualcomm patents in the China suit were software patents unrelated to cellular modems. >The patents allow users to edit and resize photos and manage apps by using a touchscreen, according to the lawsuit. https://observer.com/2018/12/qualcomm-lawsuit-iphone-ban-china-apple/ https://observer.com/2018/12/qualcomm-lawsuit-iphone-ban-chi... Apple has already issued a patch with a software workaround. You may be thinking about the case in Germany.
  - adventured 8y ago
    Samsung is seeing the same hit out of China. Jan 8 "Samsung said fourth quarter profits would likely come in at around 10.8 trillion Korean won ($9.67 billion), well shy of the market consensus of 13.2 trillion won, with sales falling 11% to 59 trillion won. Samsung only has a 1% share of the China handset market, compared to around 9% for Apple, but its chips and screens make their way into handsets made by Huawei Technologies, as well as Apple's iPhones, and that segment comprises a much larger portion of its operating profits" https://www.thestreet.com/investing/stocks/apple-v-samsung-china-slowdown-hits-smartphone-giants-but-not-equally-14827288 https://www.thestreet.com/investing/stocks/apple-v-samsung-c...
BartBoch 8y ago
1,4 billion user-base? I wonder how they calculate this. It looks like non-unique users (devices connected). Or maybe lifetime accounts number.
- saagarjha 8y ago
  I believe it's the number of unique devices that connect to one of their services in a month, or something similar to that.
  - gdilla 8y ago
    That wouldn't be a user base though. People have N apple devices each. Could be unique appleIDs to use the appstores.
    - saagarjha 8y ago
      Since you need an Apple ID to access their services, I'm sure it's easy to deduplicate users.
- ahakki 8y ago
  According to Tim Cook on the earnings call he called it "active install base". Make of that what you will.
  - tqkxzugoaupvwqr 8y ago
    Sounds like actively used devices. Which means the number of users is lower as some/many people use more than one Apple device.
- pmontra 8y ago
  Are they counting iTunes on Windows?
  - cm2187 8y ago
    Well, he didn't say happy users.

deleted 8y ago

[deleted]

mudil 8y ago

Apple discloses Services margin for the first time and it was 62.8%!

ariwilson 8y ago
Well, yeah, taking money from Google for positioning does tend to have pretty high margins...
beerlord 8y ago
This is what they need to cut if they want to sell phones. Get people gaming on iOS devices and they will buy the latest and greatest hardware to get the best experience. But if all you can play are casual games, your experience can get no better. Take a page out of Epic and Valve's book: - Cut commissions to 12% for app store purchases - Find a way to promote full-priced games, and demote free-to-play - Offer one good free game every fortnight to your entire customer base - Allow refunds within two weeks and if under 2 hours played - Sell an official Apple game controller - Offer centralised Achievements and friends - Sign up exclusive deals with the best studios - Discourage games from supporting older versions of iOS. Deprecate the iPhone 5S in iOS 13 so that developers no longer have to support that unique screen. - Focus more on battery life (including bigger batteries) to allow longer content sessions
- votepaunchy 8y ago
  The 5s has the same screen as the SE.

joering2 8y ago

Stock up 5% after hours on Cook news.

deleted 8y ago
[deleted]

scarface74 8y ago

Let’s look at the numbers and compare it to the HN narratives. https://sixcolors.com/post/2019/01/apples-dramatic-q1-2019-results/ https://sixcolors.com/post/2019/01/apples-dramatic-q1-2019-r... 1. People are abandoning Macs: Revenue for the Mac is tied for its highest quarter ever. 2. The Apple Watch is a failure/AirPods and abandoning the headphone jack is hurting Apple: Wearable and home accessories are higher than ever. 3. Apple made a mistake by raising iPhone prices: Despite Apple’s missing its revenue predictions. This is still it’s 2nd most profitable quarter ever. It’s only under its most profitable quarter by around $100 Million.

Apocryphon 8y ago
Looks like a significant drop in iPhone YoY revenue.
- scarface74 8y ago
  That’s true. But if they made up for it by focusing on services, isn’t that the sign of a well run company? No one derided them when iPod sales declined and the iPhone was growing. That would also be like critizing Netflix’s cratering DVD business while ignoring their streaming service.
Someone1234 8y ago
> compare it to the HN narratives Seems like you constructed a strawman to knock down. This site contains diverse opinions that you'd find in any community of large enough size. PS - The graphs are very attractive, but it is unclear if they're inflation adjusted. $6.9B in Q1 2015 Mac Revenue dollars is worth $7.42B in 2019 dollars.
- scarface74 8y ago
  No one does inflation adjusted year over year comparisons.
  - Someone1234 8y ago

DVassallo 8y ago

A 15% drop in iPhone sales, but net income stayed the same. ~$60B in net income in the last 12 months, and the market cap minus shareholders' equity is now ~$610B. Apple could afford to pay a 10% dividend (on the share price ex shareholders' equity) just from its earnings, without touching cash. And that's with iPhone sales dropping 15%.

umeshunni 8y ago
> net income stayed the same the WSJ article says it was helped by a tax rate that declined to 16.5% from 26% a year earlier prior to the 2017 tax overhaul.
adventured 8y ago
The operating income shows the income drop that the big tax rate change (which won't repeat next year) is helping to soften in the net income figure. A decline from $26.2b to $23.3b, or 11%.
- DVassallo 8y ago
  True. Still, the argument that AAPL is undervalued still stands even if they did $55b in net income next year. Or $50b.

cinquemb 8y ago

What I want to know, how many SE's did they sell in the past week to beat EPS by a cent?

theredbox 8y ago

Is a company like Apple actually any good for world’s economy ? They seem to be hoarding too much cash without spending any significant portion of it. I dont care about companies earning money however i care if they dont invest back.

Despegar 8y ago
They return their cash to shareholders via dividends and share buybacks, letting those investors allocate it to wherever they expect better returns. Apple doesn't need to become a conglomerate or start a corporate VC arm themselves.
- cwyers 8y ago
  No, they don't, apparently. According to the top post in the thread, they have $130 billion in cash on hand.
  - bunnycorn 8y ago
    That's nothing. They had a profit of $100 billion last fiscal year. It's the same as someone having 15.6 salaries in their bank account (not counting for the loans).
jldugger 8y ago
Do companies physically warehouse cash? No, they deposit it in the banking system, or buy treasuries with it, right? It's being invested in the world economy, just not directly.
- gumby 8y ago
  True, but what about cash in excess of what you need to keep for operations? You’ll want to put a reserve in something safe, like treasuries. You’ll want to invest some in somethingnhigher Heike for opportunistic needs, like an acquisition or, in Apple’s case, locking in pricing with suppliers (most companies can’t afford that). But if you have more than that? Might as well return to shareholders since they aren’t investing in you for your stock market prowess, but for your computer manufacturing and sales prowess. Apple had a problem for a while with that middle category: they were the fastest growing large cap stock so there wasn’t anything better than their own stock to buy. This is an interesting problem to have. Imho they still should have paid out more dividends, but what they did was probably more tax advantageous.

smaili 8y ago

Couple of interesting tidbits: * Calling out challenges with China's App Store on app game approval. * Appreciation of dollar on international markets. * Subsidized iPhones are making people less incentivized on purchasing a new phone.

bunnycorn 8y ago

AHAH, I'm rich now, I bought shares this Monday (lot's of them, for what money I had), because I know no matter what happens (Apple hit on point their revised estimate of $84B), their stock was completely under-appreciated. I'm going to sell this when the new iPhones come out next September, because it's always the same game every year. People, it's free money, don't believe me? https://www.youtube.com/watch?v=wwHlKbfX_0Y https://www.youtube.com/watch?v=wwHlKbfX_0Y This video was made last year!

mmmmmmmmm 8y ago
Did you buy on margin? Otherwise I don't see how you could get rich from a 6% jump in the stock price.
pertymcpert 8y ago
Why didn't you buy call options instead if you're so sure? Could make a lot more.

deleted 8y ago

[deleted]