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Apple Reports Second Quarter Results

109 points by thomasjudge 6y ago

Steve886 6y ago
The top-line rose by 1%. International sales accounted for 62% of the quarter’s revenue. Key highlights in four charts: https://news.alphastreet.com/apple-q2-2020-earnings-aapl-stock-charts-highlights/ https://news.alphastreet.com/apple-q2-2020-earnings-aapl-sto...
- kgwgk 6y ago
  > The top-line rose by 1% 0.5%, with services (+17%) and wearables/home/accessories (+23%) offsetting the decline in iphones/ipads/macs.
vasco 6y ago
When people ask why the stock market isn't in the dumps when it feels like the whole economy is stopped, this is why. Small business isn't on the S&P, and out of the businesses in it, a large percentage of the market value is concentrated on the tech giants who aren't getting nearly as affected by the current crisis as everyone else. If they don't actually benefit from it. Still super impressive results.
- xkjkls 6y ago
  Also, the S&P 500 about 20% just the five largest tech companies by weight: https://www.slickcharts.com/sp500 https://www.slickcharts.com/sp500
- qwerty2020 6y ago
  Effects were also only included in ~2-3 weeks of Q1 earnings.
  - jonknee 6y ago
    Keep in mind they have a significant presence in Asia, they felt this for nearly the entire quarter. Plus like Facebook, it's not all straight down. Tim Cook: > “We’ve seen a further change in the last part of March and first part of April were very depressed and then we’ve seen a pick up relative to that period of time in the second half of April" They also announced $50b more in buybacks. Apple is confident in a way that most businesses are not.
    - qwerty2020 6y ago
      Good point re: Asia presence and agree they seem confident + have the balance sheet to back it up. Overall would just be nice to see weekly splits of revenue from all these companies instead of the vague descriptors we're getting. Would be much easier to project worst case/Q2 that way.
- kgwgk 6y ago
  The current crisis doesn’t overlap much with the first quarter.
  - jonknee 6y ago
    It sure does when you build almost all your products in China.
    - kgwgk 6y ago
      Did they have a shortage of products to sell? I think the impact of not selling in China may have been more important than the impact of not producing in China last quarter. And in any case the second quarter will probably be worse.
      - jedberg 6y ago
        > Did they have a shortage of products to sell? Very much so. I ordered a new watch and it took three weeks to arrive, when usually they are just a few days. My friend who works at Apple said in March people weren't getting laptops when they joined the company because they didn't have any to give, as all the new ones were being sent to customers.
        grogenaut 6y ago
        You still bought this laptop and this watch, they just didn't get it to you. Seems like apple was still selling plenty.
        defap 6y ago
        I’d be interested to know from someone knowledgeable whether Apple can recognize the revenue from a sale before the product has been delivered to the customer. It’s not clear to me that they can/do.
        jonknee 6y ago
- heimatau 6y ago
  This is not true. The mega-wealthy aren't needing to sell their assets because the Fed is doing unlimited QE. Since the mega-wealthy own most stocks, they don't need the liquidity when their "stable" investments are backed by the Federal Reserve's unlimited free money program. This is crony capitalism.
  - jonknee 6y ago
    ... The Fed hasn't bought a single share of stock.
    - mrscottson 6y ago
      The Fed is artificially keeping interest rates low allowing idiotic stock buybacks to continue for almost no cost, keeps the cost of investor speculation cheap and they are bailing out companies that have bad non-performing loans (banks included)... The Fed's "Rube Goldberg activity" holds up the stock market...uuuuntil it doesn't. Source: My black swan farm
    - heimatau 6y ago
      > ... The Fed hasn't bought a single share of stock. 1. This is actually currently being debated within the Fed. 2. I didn't say the Fed is buying stocks. They are buying the stable assets that the mega-wealthy have in their portfolio. Mega-wealthy don't have all their eggs in one basket. The Fed in solidifying a portion of their basket which allows mega-wealthy to retain the added risk in the markets.
    - legolas2412 6y ago
      When you throw extra demand in a market, prices go up all across the board, not equally though. As for this particular situation, Fed buys corporate bonds, making companies less risky for stockowners. They also push those yields down, so capital goes to stocks to seek better returns. Tell me how Federal reserve's actions don't prop up the stock market?
    - heimatau 6y ago
      >> ... The Fed hasn't bought a single share of stock. This is not aging well. https://www.newyorkfed.org/markets/primary-and-secondary-market-faq/corporate-credit-facility-faq#.XrAcZCt1SK8.twitter https://www.newyorkfed.org/markets/primary-and-secondary-mar...
- Engineer2Throw 6y ago
  Companies that live off marketing don't deal with the same economic physics that other companies do. Take the backlash Blizzard faced for their pro China stances where Apple banned an app and received no significant backlash. Heck, there were apologists (or marketers) to defend Apple. There's not much to learn from an economic or operations standpoint from this. At best we should mimick their marketing strategies.
- ogre_codes 6y ago
  Apple is doing... OK. They are still down 13% from their highs. Boeing is trashed and announced layoffs. GM is as well and are suspending their dividend, Ford isn't exactly happy either, and plenty of other S&P giants. Disney has taken a huge hit due to sports/ ESPN revenue, theme parks, and cruise lines. Small businesses aren't on the S&P 500, but unemployed people and small businesses all buy from companies in the S&P 500. Apple also happens to have a massive cash pillow to soften their fall. Nobody else has reserves like Apple and a lot of companies have substantial debt. The stock market hasn't quite priced in damage yet.
  - siruncledrew 6y ago
    That’s for next episode in June/July for Q2.
    - ogre_codes 6y ago
      > That’s for next episode in June/July for Q2. The stock market is supposed to be a forward looking machine. Supposed to be
  - jaredklewis 6y ago
    > The stock market hasn't quite priced in damage yet. Quite the claim. Anyone with confidence in this theory should take a short position now and pick up their million bucks after the market “prices in the damage.”
    - nscalf 6y ago
      That's assuming you can time it right. I've been holding puts for ~2 months, and I went from very right to very wrong very quickly. I also fully anticipate to be very right again as soon as the fed stops pumping trillions of dollars into companies that were ill prepared for risk.
      - epistasis 6y ago
        This is totally the hard part to know: how much will Trump prop up the stock market? I recently heard the expression "the stock market is just a graph of rich people's emotions" and find it to be the most pithy truth of economics that I've encountered. A lot goes go into those emotions that we can not anticipate.
- MR4D 6y ago
  Macy’s, Boeing, United, Carnival, GE, Ford, and so on. The tech companies are important, but the overall stock market is a lot bigger than them. The companies listed above are in bad shape, but their stock should be in worse shape. Why they aren’t is the same reason the market is up. My guess? Wait for the second drop to be bigger and more brutal than the first (although it may take longer to drop).
- freepor 6y ago
  The thing is that the restaurant has waiters. Those waiters don’t take a vacation because they can’t afford it so Boeing doesn’t sell planes. Boeing isn’t growing so they lay off engineers who now don’t upgrade their iPhones. And Apple will suffer, just awhile from now.
  - tonyedgecombe 6y ago
    On the other hand a lot of people think we are going to start buying like there is no tomorrow when the immediate crisis is over.
    - freepor 6y ago
      I know I have been, entertaining myself by buying things online that I didn't really need like vintage film cameras and things.
Jonnston 6y ago
I wonder what amazon’s report is going to look like. Only half an hour until they release
- aritraghosh007 6y ago
  They already did, lower earning but higher revenue. Also, AWS topped $10B/qtr for the first time. https://s2.q4cdn.com/299287126/files/doc_financials/2020/Q1/Amazon-Q1-2020-Earnings-Release.pdf https://s2.q4cdn.com/299287126/files/doc_financials/2020/Q1/...
user5994461 6y ago
Bear in mind that the quarter is before the lockdown. >>> Apple today announced financial results for its fiscal 2020 second quarter ended March 28, 2020.
- toasterlovin 6y ago
  China is one of Apple's largest markets, though, and they were dealing with Coronavirus for the entire quarter.
  - user5994461 6y ago
    The lockdown began in Wuhan on 23th January. It was extended to the rest of China somewhen in February. That's not quite the whole quarter.
  - yfzhou 6y ago
    Wuhan was basically shut down for the whole quarter, but the rest of China was impacted for only a few weeks though. The shutdown started on Jan. 23 and things were already reopening by mid-February, and mostly back to normal in March. https://www.theverge.com/2020/2/13/21136648/apple-beijing-stores-reopen-february-14th-limited-hours-coronavirus https://www.theverge.com/2020/2/13/21136648/apple-beijing-st... https://www.theverge.com/2020/3/13/21177964/apple-stores-china-reopened-coronavirus-covid-19 https://www.theverge.com/2020/3/13/21177964/apple-stores-chi...
    - toasterlovin 6y ago
      Easing lockdowns != resumption of normal economic activity.
shakermakr 6y ago
Surprised why so many people are surprised. Digital services and platforms are booming in this current climate. We have no choice but to be consuming content. App downloads (30% thank you very much), Apple TV+ ($10 a month thank you very much), Apple Music...the list goes on. That list, apart from TV+ specials, is just revenue on the backs of other work. Others taking advantage of lockdown to product more content. Which makes these companies more and more without lifting a finger. And the Apple TV specials are short change. Just drive growth. Microsoft, Amazon, Netflix, remote tools like Mural and Zoom, all these digital platforms offering consumer and business services are king right now. Ad supported services are booming, the Facebooks, Googles, because we’re consuming more ads. It’s the cash cow of the 2010s and 2020s. Corona is only accelerating that.
- toast0 6y ago
  Consuming more ads only helps ad-servers when there are enough ads to serve. A lot of big advertising categories (travel, cars, restaurants) are having a tough time and will likely cut their ad spending.
  - filoleg 6y ago
    Apple TV+, Apple Music, and Netflix revenues have nothing to do with ads. EDIT: parent comment was significantly changed after I replied to it. Initially, it was saying that "Apple TV+, Apple Music, Netflix, and Microsoft" were having a tough time and that their ad-serving customers will likely have to cut their ad spending.
    - toast0 6y ago
      I didn't edit my comment, I was addressing my parent's comment (but didn't quote) > Ad supported services are booming, the Facebooks, Googles, because we’re consuming more ads.
      - filoleg 6y ago
        Your comment was changed some time after I replied to it (I checked about an hour or two after, so I don't know the exact time it was changed). I think most people would consider it as being "edited".
canada_dry 6y ago
Hold onto your hats though when companies release results next quarter (in early July). Consumer spending is way down across the board (everything from appliances to travel). Early indications are the stimulus checks are being saved or used to pay off existing debt - not consuming/purchasing. The ripple effect of this sudden drop will likely be unprecedented.
- himinlomax 6y ago
  That's because it's not a stimulus cheque. It's an insurance payment. You can't stimulate the economy while you're (for good reasons) shutting it down. I don't know how it is in the US but here in France I can't even go buy an appliance, or to the restaurant, or even get a fucking haircut.
  - SllX 6y ago
    Basically the same here with variations across different State and local jurisdictions.
dzonga 6y ago
does anyone have a good definition of services without bundling in fees paid by google etc to be default search engine. one thing to note though, is services is an excellent business $13bn qtr revenue, $4bn short of FB quarterly revenue.
BuyEarthAds 6y ago
Apple's second-quarter revenue was $58 billion, down 5% from a year earlier; net profit was $11.6 billion

109 points by thomasjudge 6y ago

The top-line rose by 1%. International sales accounted for 62% of the quarter’s revenue. Key highlights in four charts: https://news.alphastreet.com/apple-q2-2020-earnings-aapl-stock-charts-highlights/ https://news.alphastreet.com/apple-q2-2020-earnings-aapl-sto...

kgwgk 6y ago
> The top-line rose by 1% 0.5%, with services (+17%) and wearables/home/accessories (+23%) offsetting the decline in iphones/ipads/macs.

vasco 6y ago

When people ask why the stock market isn't in the dumps when it feels like the whole economy is stopped, this is why. Small business isn't on the S&P, and out of the businesses in it, a large percentage of the market value is concentrated on the tech giants who aren't getting nearly as affected by the current crisis as everyone else. If they don't actually benefit from it. Still super impressive results.

xkjkls 6y ago
Also, the S&P 500 about 20% just the five largest tech companies by weight: https://www.slickcharts.com/sp500 https://www.slickcharts.com/sp500
qwerty2020 6y ago
Effects were also only included in ~2-3 weeks of Q1 earnings.
- jonknee 6y ago
  Keep in mind they have a significant presence in Asia, they felt this for nearly the entire quarter. Plus like Facebook, it's not all straight down. Tim Cook: > “We’ve seen a further change in the last part of March and first part of April were very depressed and then we’ve seen a pick up relative to that period of time in the second half of April" They also announced $50b more in buybacks. Apple is confident in a way that most businesses are not.
  - qwerty2020 6y ago
    Good point re: Asia presence and agree they seem confident + have the balance sheet to back it up. Overall would just be nice to see weekly splits of revenue from all these companies instead of the vague descriptors we're getting. Would be much easier to project worst case/Q2 that way.
kgwgk 6y ago
The current crisis doesn’t overlap much with the first quarter.
- jonknee 6y ago
  It sure does when you build almost all your products in China.
  - kgwgk 6y ago
    Did they have a shortage of products to sell? I think the impact of not selling in China may have been more important than the impact of not producing in China last quarter. And in any case the second quarter will probably be worse.
    - jedberg 6y ago
      > Did they have a shortage of products to sell? Very much so. I ordered a new watch and it took three weeks to arrive, when usually they are just a few days. My friend who works at Apple said in March people weren't getting laptops when they joined the company because they didn't have any to give, as all the new ones were being sent to customers.
      - grogenaut 6y ago
        You still bought this laptop and this watch, they just didn't get it to you. Seems like apple was still selling plenty.
        defap 6y ago
        I’d be interested to know from someone knowledgeable whether Apple can recognize the revenue from a sale before the product has been delivered to the customer. It’s not clear to me that they can/do.
        jonknee 6y ago
heimatau 6y ago
This is not true. The mega-wealthy aren't needing to sell their assets because the Fed is doing unlimited QE. Since the mega-wealthy own most stocks, they don't need the liquidity when their "stable" investments are backed by the Federal Reserve's unlimited free money program. This is crony capitalism.
- jonknee 6y ago
  ... The Fed hasn't bought a single share of stock.
  - mrscottson 6y ago
    The Fed is artificially keeping interest rates low allowing idiotic stock buybacks to continue for almost no cost, keeps the cost of investor speculation cheap and they are bailing out companies that have bad non-performing loans (banks included)... The Fed's "Rube Goldberg activity" holds up the stock market...uuuuntil it doesn't. Source: My black swan farm
  - heimatau 6y ago
    > ... The Fed hasn't bought a single share of stock. 1. This is actually currently being debated within the Fed. 2. I didn't say the Fed is buying stocks. They are buying the stable assets that the mega-wealthy have in their portfolio. Mega-wealthy don't have all their eggs in one basket. The Fed in solidifying a portion of their basket which allows mega-wealthy to retain the added risk in the markets.
  - legolas2412 6y ago
    When you throw extra demand in a market, prices go up all across the board, not equally though. As for this particular situation, Fed buys corporate bonds, making companies less risky for stockowners. They also push those yields down, so capital goes to stocks to seek better returns. Tell me how Federal reserve's actions don't prop up the stock market?
  - heimatau 6y ago
    >> ... The Fed hasn't bought a single share of stock. This is not aging well. https://www.newyorkfed.org/markets/primary-and-secondary-market-faq/corporate-credit-facility-faq#.XrAcZCt1SK8.twitter https://www.newyorkfed.org/markets/primary-and-secondary-mar...
Engineer2Throw 6y ago
Companies that live off marketing don't deal with the same economic physics that other companies do. Take the backlash Blizzard faced for their pro China stances where Apple banned an app and received no significant backlash. Heck, there were apologists (or marketers) to defend Apple. There's not much to learn from an economic or operations standpoint from this. At best we should mimick their marketing strategies.
ogre_codes 6y ago
Apple is doing... OK. They are still down 13% from their highs. Boeing is trashed and announced layoffs. GM is as well and are suspending their dividend, Ford isn't exactly happy either, and plenty of other S&P giants. Disney has taken a huge hit due to sports/ ESPN revenue, theme parks, and cruise lines. Small businesses aren't on the S&P 500, but unemployed people and small businesses all buy from companies in the S&P 500. Apple also happens to have a massive cash pillow to soften their fall. Nobody else has reserves like Apple and a lot of companies have substantial debt. The stock market hasn't quite priced in damage yet.
- siruncledrew 6y ago
  That’s for next episode in June/July for Q2.
  - ogre_codes 6y ago
    > That’s for next episode in June/July for Q2. The stock market is supposed to be a forward looking machine. Supposed to be
- jaredklewis 6y ago
  > The stock market hasn't quite priced in damage yet. Quite the claim. Anyone with confidence in this theory should take a short position now and pick up their million bucks after the market “prices in the damage.”
  - nscalf 6y ago
    That's assuming you can time it right. I've been holding puts for ~2 months, and I went from very right to very wrong very quickly. I also fully anticipate to be very right again as soon as the fed stops pumping trillions of dollars into companies that were ill prepared for risk.
    - epistasis 6y ago
      This is totally the hard part to know: how much will Trump prop up the stock market? I recently heard the expression "the stock market is just a graph of rich people's emotions" and find it to be the most pithy truth of economics that I've encountered. A lot goes go into those emotions that we can not anticipate.
MR4D 6y ago
Macy’s, Boeing, United, Carnival, GE, Ford, and so on. The tech companies are important, but the overall stock market is a lot bigger than them. The companies listed above are in bad shape, but their stock should be in worse shape. Why they aren’t is the same reason the market is up. My guess? Wait for the second drop to be bigger and more brutal than the first (although it may take longer to drop).
freepor 6y ago
The thing is that the restaurant has waiters. Those waiters don’t take a vacation because they can’t afford it so Boeing doesn’t sell planes. Boeing isn’t growing so they lay off engineers who now don’t upgrade their iPhones. And Apple will suffer, just awhile from now.
- tonyedgecombe 6y ago
  On the other hand a lot of people think we are going to start buying like there is no tomorrow when the immediate crisis is over.
  - freepor 6y ago
    I know I have been, entertaining myself by buying things online that I didn't really need like vintage film cameras and things.

Jonnston 6y ago

I wonder what amazon’s report is going to look like. Only half an hour until they release

aritraghosh007 6y ago
They already did, lower earning but higher revenue. Also, AWS topped $10B/qtr for the first time. https://s2.q4cdn.com/299287126/files/doc_financials/2020/Q1/Amazon-Q1-2020-Earnings-Release.pdf https://s2.q4cdn.com/299287126/files/doc_financials/2020/Q1/...

user5994461 6y ago

Bear in mind that the quarter is before the lockdown. >>> Apple today announced financial results for its fiscal 2020 second quarter ended March 28, 2020.

toasterlovin 6y ago
China is one of Apple's largest markets, though, and they were dealing with Coronavirus for the entire quarter.
- user5994461 6y ago
  The lockdown began in Wuhan on 23th January. It was extended to the rest of China somewhen in February. That's not quite the whole quarter.
- yfzhou 6y ago
  Wuhan was basically shut down for the whole quarter, but the rest of China was impacted for only a few weeks though. The shutdown started on Jan. 23 and things were already reopening by mid-February, and mostly back to normal in March. https://www.theverge.com/2020/2/13/21136648/apple-beijing-stores-reopen-february-14th-limited-hours-coronavirus https://www.theverge.com/2020/2/13/21136648/apple-beijing-st... https://www.theverge.com/2020/3/13/21177964/apple-stores-china-reopened-coronavirus-covid-19 https://www.theverge.com/2020/3/13/21177964/apple-stores-chi...
  - toasterlovin 6y ago
    Easing lockdowns != resumption of normal economic activity.

shakermakr 6y ago

Surprised why so many people are surprised. Digital services and platforms are booming in this current climate. We have no choice but to be consuming content. App downloads (30% thank you very much), Apple TV+ ($10 a month thank you very much), Apple Music...the list goes on. That list, apart from TV+ specials, is just revenue on the backs of other work. Others taking advantage of lockdown to product more content. Which makes these companies more and more without lifting a finger. And the Apple TV specials are short change. Just drive growth. Microsoft, Amazon, Netflix, remote tools like Mural and Zoom, all these digital platforms offering consumer and business services are king right now. Ad supported services are booming, the Facebooks, Googles, because we’re consuming more ads. It’s the cash cow of the 2010s and 2020s. Corona is only accelerating that.

toast0 6y ago
Consuming more ads only helps ad-servers when there are enough ads to serve. A lot of big advertising categories (travel, cars, restaurants) are having a tough time and will likely cut their ad spending.
- filoleg 6y ago
  Apple TV+, Apple Music, and Netflix revenues have nothing to do with ads. EDIT: parent comment was significantly changed after I replied to it. Initially, it was saying that "Apple TV+, Apple Music, Netflix, and Microsoft" were having a tough time and that their ad-serving customers will likely have to cut their ad spending.
  - toast0 6y ago
    I didn't edit my comment, I was addressing my parent's comment (but didn't quote) > Ad supported services are booming, the Facebooks, Googles, because we’re consuming more ads.
    - filoleg 6y ago
      Your comment was changed some time after I replied to it (I checked about an hour or two after, so I don't know the exact time it was changed). I think most people would consider it as being "edited".

canada_dry 6y ago

Hold onto your hats though when companies release results next quarter (in early July). Consumer spending is way down across the board (everything from appliances to travel). Early indications are the stimulus checks are being saved or used to pay off existing debt - not consuming/purchasing. The ripple effect of this sudden drop will likely be unprecedented.

himinlomax 6y ago
That's because it's not a stimulus cheque. It's an insurance payment. You can't stimulate the economy while you're (for good reasons) shutting it down. I don't know how it is in the US but here in France I can't even go buy an appliance, or to the restaurant, or even get a fucking haircut.
- SllX 6y ago
  Basically the same here with variations across different State and local jurisdictions.

dzonga 6y ago

does anyone have a good definition of services without bundling in fees paid by google etc to be default search engine. one thing to note though, is services is an excellent business $13bn qtr revenue, $4bn short of FB quarterly revenue.

BuyEarthAds 6y ago

Apple's second-quarter revenue was $58 billion, down 5% from a year earlier; net profit was $11.6 billion