Apple beats Street

MacDailyNews ^ | August 31, 2016, 1:30PM

[Swordmaker]

Apple today announced financial results for its fiscal 2017 third quarter ended July 1, 2017. The company posted quarterly revenue of $45.4 billion and quarterly earnings per diluted share of $1.67. These results compare to revenue of $42.4 billion and earnings per diluted share of $1.42 in the year-ago quarter. International sales accounted for 61 percent of the quarter’s revenue.

Analysts polled by Thomson Reuters expected Apple to report $1.57 EPS on revenue of $44.89 billion for the quarter.

“With revenue up 7 percent year-over-year, we’re happy to report our third consecutive quarter of accelerating growth and an all-time quarterly record for Services revenue,” said Tim Cook, Apple’s CEO, in a statement. “We hosted an incredibly successful Worldwide Developers Conference in June, and we’re very excited about the advances in iOS, macOS, watchOS and tvOS coming this fall.”

“We reported unit and revenue growth in all our product categories in the June quarter, driving 17 percent growth in earnings per share,” said Luca Maestri, Apple’s CFO, in a statement. “We also returned $11.7 billion to investors during the quarter, bringing cumulative capital returns under our program to almost $223 billion.”

 
Apple is providing the following guidance for its fiscal 2017 fourth quarter:

• revenue between $49 billion and $52 billion
• gross margin between 37.5 percent and 38 percent
• operating expenses between $6.7 billion and $6.8 billion
• other income/(expense) of $500 million
• tax rate of 25.5 percent

Apple’s board of directors has declared a cash dividend of $0.63 per share of the company’s common stock. The dividend is payable on August 17, 2017 to shareholders of record as of the close of business on August 14, 2017.

MacDailyNews Take: Boom! Good quarter!

Services bonanza (up 22% YOY)!

iPad unit shipments increased (15%) for the first time in 14 quarters (thanks, $329 iPad).

Good guidance, too! Apple’s Q417 revenue guidance of between $49 billion and $52 billion exceeded expectations, with analysts’ consensus at $49.2 billion. Strong guidance implies an on-time iPhone launch (not significantly delayed, if at all).

UPDATE: AAPL after hours: $159.10, up $9.05 (+6.03%) @ 6:20PM EDT

[Timpanagos1]

Apple’s market cap is $782.3 billion.

Apple will be the first trillion dollar company.

Americans are Going Back to Work!

[ButThreeLeftsDo]

NASDAQ futures up $47.50

[Swordmaker]

Apple Beats Street guesstimates by close to a Billion in revenue. Apple posted quarterly revenue of $45.4 billion and quarterly earnings per diluted share of $1.67, which is $3 billion and 25¢ more than the same quarter a year ago. even the iPad showed a 15% year-over-year growth. . . and the Mac a 7%. So much for all of the FUDin the last few weeks leading up to the quarterly report. — PING!

Apple beats street
Ping!

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[big'ol_freeper]

Title should have been ‘Apple beats Street...again and again and again’

[Vision Thing]

I’m no apple fanboi, but I bought shares when the p/e multiple showed no respect for the ridiculous religious devotion of apple consumers. It was a no-brainer to buy. Glad the market is starting to acknowledge the apple consumer. Gonna cash out soon.

[smokingfrog]

Looks like iPhone sales are down though.

[Swordmaker]

Looks like iPhone sales are down though.

No, they are UP when you compare like quarter to like quarter on year over year by 2%. . . Unit sales are up over 700,000 units over the third fiscal quarter of 2016. You never compare sequential quarters because there are different forces at work during different months. For example you'd never compare the first Calendar quarter sales with the last calendar quarter sales, because the last calendar quarter includes all the sales for Christmas giving. There is no comparable gifting holiday in the first calendar quarter.

[Swordmaker]

MacDailyNews presents live notes from Apple’s Q317 conference call

Tuesday, August 1, 2017 · 4:45 pm

MacDailyNews presents live notes from Apple’s Q317 Conference Call with analysts starting at 5pm EDT/2pm PDT today.

Apple will provide live audio streaming of its Q317 Results Conference Call using Apple’s industry-leading QuickTime multimedia software.

Apple today announced financial results for its fiscal 2017 third quarter ended July 1, 2017. The company posted quarterly revenue of $45.4 billion and quarterly earnings per diluted share of $1.67. According to Thomson Reuters, the analysts’ consensus estimates called for revenue of $44.89 billion and EPS of $1.57.

For their fiscal 2017 fourth quarter, Apple guided for revenue between $49 billion and $52 billion.

Apple is very likely to open regular trading at a new all-time high tomorrow! AAPL after hours: $159.59, +$9.54 (+6.36%) @ 5:59PM EDT Live notes from Apple’s Q117 Conference Call in reverse (I have put them in correct order—Swordmaker) chronological order:

Start of conference call

• Apple CEO Tim Cook: Apple is proud to announce every strong results with unit and revenue growth in all of Apple’s product categories
• Unit sales:
  • iPhone: 41.026 million (+2% YOY)
  • iPad: 11.424 million (+15% YOY)
  • Mac: 4.292 million (+1% YOY)
• Other Products revenue: $2.735 billion (+23% YOY)
  (Other Products includes sales of Apple Watch, Apple TV, Beats products, iPod and Apple-branded and third-party accessories.)
• Services revenue:7.266 billion (+22% YOY)
  (Services includes revenue from Digital Content and Services, AppleCare, Apple Pay, licensing and other services.)

• Apple returned $11.7 billion to investors during Q317, bringing cumulative capital returns to nearly $223 billion.

• Apple had a very strong WWDC and the announcements will help delight Apple customers in the coming year
• iPhone 7 was the most popular iPhone. iPhone 7 Plus was up strongly over iPhone 6s Plus
• 1.2 billion cumulative iPhone units sold to date
• Apple Services up strongly – now the size of a Fortune 100 company
• Apple achieved highest worldwide tablet marketshare in over four years thanks to new iPads
• iPad unit sales have returned to growth
• iPad sales up 32% YOY to U.S. education purchasers
• Mac gained global unit marketshare; revenue grew 7% YOY
• Apple off to a great start to Back to School with newly refreshed Mac portables
• Apple Watch sales up over 50% YOY in the quarter
• Apple Watch will become more intelligent than ever with watchOS 4 this fall
• 98% customer satisfaction for AirPods
• Apple has increased AirPods production; still working to meet strong demand
• Apple very excited about iOS 11, macOS High Sierra, tvOS, and watchOS 4 coming this fall
• With ARKit, it’s clear that the imagination of developers has been captured
• Apple believes AR has broad mainstream applicability
• iOS will become the world’s biggest AR platform as soon as iOS 11 ships
• HomePod coming this year with astounding audio quality – unlike any other wireless home speaker on the market
• HomePod has strong home automation capabilities
• Cook: Apple might even have some more innovations to share with you later this year
• Luca Maestri reviews financials…
• Apple now has lowest iPhone channel inventory in over 2 years
• Apple very pleased with iPhone results, especially since it was a tough compare (Apple launched iPhone SE)
• In the U.S. (451 Research) 95% customer sat. for iPhone 7 and 99% customer sat. for iPhone 7 Plus
• App Store generates nearly twice the revenue of Google Play
• Apple Pay is by far the #1 NFC payment service on mobile devices with over 90% of transactions worldwide
• MacBook Pro is a strong performer (97% customer satisfaction)
• Mac within Apple’s channel inventory target range
• iPad within Apple’s channel inventory target range
• iPad had 55% share of U.S. tablet market; 89% share of tablets prices over $200
• iPad customer satisfaction ranges from 95-99% across all models
• Walmart to deploy over 19,000 iPads to train associates across the U.S.
• New Cisco partnership ads to enterprise security; will make cyber insurance more attainable to businesses
• SAP app for human resources will support 45 million users worldwide
• Maestri reviews U.S. schools deploying Apple iPads and other products
• Apple Stores now total 497 locations worldwide
• New record of $261.5 billion in cash and marketable securities
• Apple repurchased 30.4 million Apple shares for about $4.5 billion in the quarter.

Guidance for next fiscal quarter:

• Apple is providing the following guidance for its fiscal 2017 fourth quarter:
  • revenue between $49 billion and $52 billion
  • gross margin between 37.5 percent and 38 percent
  • operating expenses between $6.7 billion and $6.8 billion
  • other income/(expense) of $500 million
  • tax rate of 25.5 percent

Analysts’ questions begin…

• Maestri more difficult memory prices vs. a year ago
• Product transitions affect gross margins
• Cook: We’re looking very much forward to the product rollouts [to come in 2H 2017]
• We are very encouraged by the results this quarter; exceeded Cook’s expectations
• iPad grew dramatically more than market; Mac grew much more than market; Services grew extremely strongly
• iPhone held its own
• What Apple sees in mainland China is definitely encouraging
• WeChat makes the switching opportunity for Apple even greater
• Apple sees Tencent as one of Apple’s biggest and best developers; Apple looks forward to working with Tencent even more
• iPhone upgrade totals for this fiscal year are the highest that Apple’s seen
• Based on the amount of “iPhone 8” rumors, Cook feels there is a “pause” in iPhone sales; bodes well for pent-up demand
• Cook: Outside of China, Android switchers up YOY and helped with Apple’s successful channel inventory reduction during the quarter
• Cook: Apple has created 2 million jobs in the U.S. (3/4 of that 2 million are app developers)
• Cook: Apple could have only been created here in the U.S., so we feel a responsibility to job creation in the U.S.
• Cook talks of Swift Playgrounds helping increase developer base
• Cook: Apple has purchased about $50 billion worth of goods and services from U.S. suppliers
• Apple has established a $1 billion (to start) fund for U.S. manufacturing and plants
• $200 million has already been invested in a Corning plant
• Cook: 2/3rd of employee base in the U.S. and we’ll have “some things we’ll say about that later in the year.”
• Cook ducks question about President Trump’s claim that Apple will build 3 “big, beautiful” manufacturing plants in the U.S.
• Cook: Central gov’t in China tightened regulations on VPN apps. A license is required
• Cook: We were required to remove unlicensed VPN apps from App Store in China; other app stores
• Cook: There are VPN apps available in China App Store
• Cook: In every country, we abide by the laws of that country
• Cook: We believe in engaging the countries where we do business; se state our point of view in the appropriate ways
• Cook hopes/expects to see some loosening of China’s stance on VPN apps in the future
• Maestri: We feel very good about the performance of the business right now; Appel Watch and AirPods are doing incredibly well
• We think China performance will continue to improve and that drives of guidance
• Cook: Apple original content. We’re currently focused on Apple Music original content. It’s for our own learning and also to give Apple Music subscribers exclusive content. We’ve recently hired two producers of top notch content
• Cook: We are very focuses on autonomous driving systems from a core tech point of view; it’s the “Mother of all AI projects.”
• Cook: autonomous systems goes beyond cars and that’s all I want to say about that
• Cook: I could not be more excited about AR and ARKit – just take a look at the early ARKit projects we’re seeing the Web already
• Cook: AR is big and profound and we will look back someday and marvel at the start of it
• It feels great to get this thing [AR] going at a level that can get so many developers involved
• Maestri: Our Services business is very broad
• Services is accelerating because the App Store is seeing an increasing large amount of paying accounts
• Apple is making it easier for customers outside the U.S. to pay for apps on the App Store
• Quality and quantity of App Store content continues to improve
• Apple Music is growing very fast as are iCloud storage subscriptions
• Customers get on the App Store and start spending and then, in general, tend to spend more over time
• Cook re next-gen iPhones: We have no comment on anything that’s not announced.
• Cook: I do think we can grow both in iPhone unit sales and market share; the installed base is growing which generates more upgrades; Apple feels good about ability to convince people to switch to iPhone; and in emerging markets [like India], Apple hasn’t even really gotten started
• Cook: India reminds me of where we were in China several years ago; we are very excited about our opportunities in India
• End of call.

Apple’s Q417 revenue guidance of between $49 billion and $52 billion for this quarter exceeded expectations, with analysts’ consensus at $49.2 billion

AAPL after hours: $157.65, +$7.60 (+5.06%) @ 4:42PM EDT

AAPL after hours: $158.28, +$8.23 (+5.48%) @ 4:45PM EDT

• Apple is trading above its all-time high in after hour trading

[SamAdams76]

Pretty amazing that 1,200,000,000 iPhones have been sold since the launch 10 years ago. They will likely sell their next 1.2 billion iPhones in less than 5 years!

Looking forward to getting the HomePod. I've invested in a Bose wireless system in my home but I'm willing to switch over if the audio quality and connectivity is as good as they say it is. I'm generally happy with the Bose system but the Airplay from my various Apple devices often cuts out when I move those devices around. I'm betting an Apple wireless system will work with Airplay much more reliably.

I had to think about what they were referring to with AR...that's Augmented Reality, likely a $200b a year industry within five years!

[adorno]

Apple’s market cap is $782.3 billion.

The first "trillion dollar company" was Microsoft, over a decade ago, when adjusting for inflation.

[Chgogal]

I heard iPhone 8 will cost about $1,200, is that true?

[Chgogal]

Well, then MS should be over a trillion now. But it ain’t.

[Chgogal]

Apple was at $158 the last I saw.....

[adorno]

Well, then MS should be over a trillion now. But it ain’t.

That's not the way things work, and fortunes and ideas and market forces change, and so do the needs and wants and desires of the public.

If Apple didn't have the iPhone, they would just be another high-tech company, and not worth much more than an HP or Dell.

Meanwhile, for longevity and long-term prospects, I'd put my money on Microsoft, because they are not depended on one product to carry them through the ups and downs of market forces and the whims of the public.

The fact remains that, for what existed BACK THEN, Microsoft did reach the "trillion dollar" mark, if one were to adjust their market cap "of then" to today's dollars.

[Swordmaker]

The first "trillion dollar company" was Microsoft, over a decade ago, when adjusting for inflation.

No, Adorno, You can't adjust for future inflation. . . because you never know what inflation is going to be. That is merely wishful thinking. Capitalization only counts in the current valuation of currencies, not in what it someday may be counted as being diluted to; that's meaningless drivel type of thinking. You want to think that way, you can go back to the robber barons of the turn of the last century and use the value of what their stock would one day become worth and say THEIR stock at that time was the first "trillion dollar" company even though it was only capitalized at $100 million, based on the same kind of reasoning. There are companies right now that have capitalizations of over $3 trillion. . . but they are not purely private companies, being quasi government entities or fully government owned.

[Swordmaker]

I heard iPhone 8 will cost about $1,200, is that true?

Most likely a FUD rumor the FUDsters were floating to try to force the price of AAPL down in advance of this financial conference call so their shorts would work. If Apple can make and sell a 13" iPad Pro for $799, I think they'll be able to keep their iPhone 8 (or whatever they are going to call it) for very close to their usual price targets they've maintained for years for their flagship phones.

[adorno]

No, Adorno, You can't adjust for future inflation.

Ok, so I know that you want to protect your first love (Apple) from looking like it's not the "first" at something, but, the FACT remains that, Microsoft did reach that "trillion dollar" milestone after one adjusts for inflation.

And, comparing past dollar figures against current dollar figures, makes no sense whatsoever, unless one adjusts the "then figure" to the current value of the currency. Adjusting for inflation is done all the time, when people want to compare to arrive at "same value" figures. But, you can continue believing that your precious Apple might be first, no matter how fallacious your beliefs might be. Your way of thinking reminds me that, you really do worship Apple like a cult, and cults are difficult to leave.

[Swordmaker]

Apple was at $158 the last I saw.....

$159.50 as of 8:33 PM Pacific Time. Adjusted for the last split (times 7) that's $1,116.50 per split adjusted share.

[Chgogal]

If Apple didn’t have the iPhone, they would just be another high-tech company, and not worth much more than an HP or Dell.

Apple did have the iPhone and it changed the world. FYI, I still have to own a iPhone.