Apple’s could-have-been-much-worse June quarter in five easy charts

The ups and downs of Apple’s revenue, diluted earnings, iPhone sales, services and revenue from greater China.

apple five easy charts q3 2019Apple reported better-than-expected revenue and earnings Tuesday. Wall Street was pleasantly surprised. In after-hours trading the stock moved more than $9.35 a share (4.48%) higher, topping $218.

From the press release:

“This was our biggest June quarter ever — driven by all-time record revenue from Services, accelerating growth from Wearables, strong performance from iPad and Mac and significant improvement in iPhone trends,” said Tim Cook, Apple’s CEO. “These results are promising across all our geographic segments, and we’re confident about what’s ahead. The balance of calendar 2019 will be an exciting period, with major launches on all of our platforms, new services and several new products.”

“Our year-over-year business performance improved compared to the March quarter and drove strong operating cash flow of $11.6 billion,” said Luca Maestri, Apple’s CFO. “We returned over $21 billion to shareholders during the quarter, including $17 billion through open market repurchases of almost 88 million Apple shares, and $3.6 billion in dividends and equivalents.”

Apple is providing the following guidance for its fiscal 2019 fourth quarter:

    • revenue between $61 billion and $64 billion
    • gross margin between 37.5 percent and 38.5 percent
    • operating expenses between $8.7 billion and $8.8 billion
    • other income/(expense) of $200 million
    • tax rate of approximately 16.5 percent

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 August 15, 2019 to shareholders of record as of the close of business on August 12, 2019.

Apple’s press release. Earnings call transcript.

Below: The five charts. Click the second column to see year-over-year growth. (Not seeing the charts? Try the website.)




33 Comments

  1. Gregg Thurman said:
    A great big RASPBERRY to:

    Toni Sacconaghi, Bernstein
    Rod Hall, Goldman Sachs
    Erwan Rembourg, HSBC
    Ananda Baruah, Loop Capital
    Pierre Ferragu, New Street Research
    and Jun Zhang, Rosenblatt,

    universally known as the “Usual Suspects” for their astute analysis of Apple.

    0
    July 30, 2019
  2. Gregg Thurman said:
    “Kudos” too:

    Jim Kelleher, Argus Research
    Walter Piecyk, Baird Equity
    Krish Sankar, Cowen Associates
    Tom Forte, DA Davidson
    Amit Daryanani, Evercore
    Shebly Seyrafi, FBN
    Samik Chatterjee, JP Morgan
    Wamsi Mohan, Merrill Lynch
    Katy Huberty, Morgan Stanley
    Michael Olson, Piper Jaffray
    Christopher Caso, Raymond James
    Timothy Arcuri, UBS
    Unnamed Analyst, NA
    Daniel Ives, Wedbush
    Steven Milunovich, Wolfe Research

    Collectively known (conservatively) as very smart people (highlighted analysts are even smarter).

    1
    July 30, 2019
  3. Fred Stein said:
    Little Gem buried: Mac up 11%, outpacing PC market. For all those who worry about peak SmartPhone or people holding on the iPhones longer or when 5G arrives, etc., Don’t worry.

    1
    July 30, 2019
    • victor castroll said:
      Fred Stein said:
      Little Gem buried: Mac up 11%, outpacing PC market. For all those who worry about peak SmartPhone or people holding on the iPhones longer or when 5G arrives, etc., Don’t worry.

      Mac revenue gonna replace iPhone

      0
      July 30, 2019
      • Fred Stein said:
        Maybe you’re onto something. (Kidding) Actually iPhone was about 48% of revenue and Services above 20%. Maybe Services will outpace iPhones in 5 or so years.

        Just this quarter, Services and Wearables are 1/3 of the revenue. Who would have thought that 5 years ago?

        0
        July 30, 2019
      • Gregg Thurman said:
        “Mac revenue gonna replace iPhone.”

        No, it isn’t.

        Apple dropped computer from its name long ago, and for good reason. Apple is not a computer company, although it manufactures computers. Nor is it a handset company, although it manufactures handsets. The same can be said of iPads, Apple Watches, AirPods, Home Pods, etc.

        But as one segment suffers Apple has other segments that can and do pick up the slack. The latest of which is Services that have just recently started to pick up material steam.

        In my opinion, in the near future Services will eventually become the stable engine that drives Apple, and discussions about how well iPhone, Macs, iPads, etc are doing will become moot.

        0
        July 30, 2019
  4. Phil Service said:
    Wearables a big story today. I’ve been an Apple Watch wearer since Gen 0. According to my unscientific survey, among current Apple Watch wearers, women outnumber men by at least 3:1. Does anyone else see that? If so, what, if anything, does it mean for the wearables category?

    1
    July 30, 2019
    • Aaron Belich said:
      Women may lose weight faster than men? Buy Lululemon?

      0
      July 30, 2019
    • Fred Stein said:
      Yes wearables is big. It’s the next big/little thing. The gender issue is interesting. Let’s be wary of poor sampling science and stereotyping. That said, Apple clearly understands the fashion statement value of watches. This applies to men and women. I’ve seen quite a few men and women with the Milanese Loop.

      With Apple Pay taking off, paying with the Watch becomes a fashion statement and a convenience. Soon, Apple Card will become a fashion statement and a convenience.

      Now, looking inwardly, no one comes close to Apple’s chip technology for wearables, as in Watch and AirPod. In both categories, the competition remains a fragmented waste.

      0
      July 30, 2019
  5. Kirk Burgess said:
    Solid quarter. Solid guidance.
    Great performance from wearables/home.
    Bonus was excellent commentary regarding China returning to growth.

    1
    July 30, 2019
  6. Kathy Corby said:
    Hey Vic, I think you’re wrong about the post earnings drop. Sure there will be a pullback– about 70% of the time there is after an earnings beat. But what really impressed, and what isn’t reflected in PED’s excellent charts, is the guidance going forward. The Street did ‘t expect that, and in fact I think few of us did, but with the market “forward looking””, and the 5G buzz likely to start in a couple of months, aaaand the titanium card about to hit the public’s awareness , aaaand Apple TV buzz combined with Arcade buzz– well, I foresee a nice old fashioned melt-up of the kind I recall from past years, not a fade like last quarter’s. From my lips to God’s ear….

    3
    July 30, 2019
    • victor castroll said:
      hi kathy (and joe)

      congrats. amazing strength for a so so quarter.

      i was asked to provide protection for all-in nest eggers. i did so in the way of jan 20 200p.

      let’s see where $ is at jan 20.

      congrats again.

      best,

      vic

      0
      July 31, 2019
    • victor castroll said:
      kathy,

      you already had a melt-up.

      0
      July 31, 2019

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