Ap­ple’s Q4 re­port shows in­creased rev­enues

iPhone sales re­main flat year-over-year, but the cash flow is only get­ting bet­ter, re­veals Leif John­son

iPad&iPhone user - - CONTENTS -

Ap­ple has re­leased its earn­ings re­port for the fourth quar­ter end­ing on Septem­ber 30. Over­all rev­enue reached $62.9 bil­lion, mark­ing a 20 per­cent boost from the year-ago quar­ter, and quar­terly earn­ings per di­luted share amounted to $2.41, mark­ing a 41 per­cent in­crease.

In­ter­na­tional sales played a big role in this suc­cess story, as they were re­spon­si­ble for 61 per­cent of

Ap­ple’s rev­enue. This was a led by a 34 per­cent in­crease in rev­enue from Ja­pan and by a 22 per­cent in­crease from the rest of east Asia. While there was plenty of good news, Ap­ple stock fell by 7.3 per­cent in after-hours trad­ing. That was enough to bring it be­low its fa­mous $1 tril­lion val­u­a­tion, par­tic­u­larly if it stays that way through the night.

Part of the rea­son for the stock slide is that Ap­ple’s posted guid­ance for rev­enue in the hol­i­day quar­ter is be­tween $89 bil­lion and $93 bil­lion, which is bet­ter than the $84 bil­lion and $87 bil­lion posted last year but less than the roughly $98 bil­lion many an­a­lysts were hop­ing for.

iPhones, iPads, and Macs

iPhones sales were vir­tu­ally flat in year-over-year sales, as Ap­ple re­ported it had sold 46.89 mil­lion iPhones dur­ing the quar­ter, com­pared to the 46.7 mil­lion iPhones it sold last year. Note that the iPhone XR didn’t start ship­ping un­til 19 Oc­to­ber, and that the iPhone XS had only been avail­able for 10 days of the quar­ter.

But that isn’t re­ally af­fect­ing the amount of money Ap­ple is mak­ing on the iPhones, con­sid­er­ing how pricey the units are these days. Ap­ple re­ported an av­er­age sell­ing price (ASP) of £793, beat­ing the £618 from the year-ago quar­ter by a whop­ping 28 per­cent.

As a re­minder, the iPhone XS has a start­ing price of £999, while the XS Max starts at £1,100. As usual, Ap­ple didn’t spec­ify the sales num­bers for each in­di­vid­ual phone – in fact, it will no longer re­port the unit sales num­bers for the en­tire iPhone line in the fu­ture, as Ap­ple fi­nan­cial chief Luca Maestri said on

call that the “num­ber of units sold in the quar­ter is not rep­re­sen­ta­tive of the un­der­ly­ing state of busi­ness”.

Ap­ple’s re­port showed that the iPad con­tin­ues its gen­tle de­cline, as the line earned rev­enue of $4.01 bil­lion from 9.7 mil­lion units sold, down 15 per­cent from the $4.8 bil­lion it re­ported last year. This de­cline could re­verse by next year, though, if con­sumers find that the new iPad Pro mod­els are as im­pres­sive as they look.

Macs saw a slight in­crease in rev­enue even though the num­ber of units sold (5.3 mil­lion) dropped by 2 per­cent. In to­tal, the rev­enue was up 3 per­cent to 7.4 bil­lion this year, com­pared to the 7.1 bil­lion a year ago. The iMac Pro, re­leased to­ward the end of 2017, might have been partly re­spon­si­ble for the boost.

Glad to be of ser­vice

Ap­ple has been tout­ing its strength in ser­vices lately, and that strength shows up in the $9.98 bil­lion ser­vices rev­enue Ap­ple re­ported. That’s an im­pres­sive in­crease of 17 per­cent over last year, but it failed to reach Wall Street es­ti­mates in the neigh­bour­hood of $10.2 bil­lion. ‘Ser­vices’ is a broad and vague term, but it in­cludes things such as sub­scrip­tions to Ap­ple Mu­sic and App Store sales.

Other items of busi­ness

Ap­ple also did well in its Other Prod­ucts cat­e­gory, a sim­i­larly vague bracket that in­cludes de­vices such as the Ap­ple Watch and AirPods. Last quar­ter, rev­enue here reached $4.23 bil­lion, an in­crease of 31 per­cent over the $3.2 bil­lion re­ported last year.

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