Drop in iPhone sales and record revenue thanks to services, smart watches and headphones – the main thing from the financial report of Apple
31.10.2019 Francis Patterson 0 Comments
Last night, Apple released its next quarterly report. On the accounting calendar of the Cupertino giant on September 28, the fourth quarter of fiscal year 2019 and the whole year ended (Apple has a fiscal year that does not coincide with the calendar year). In short, the tendency to decline in sales of the iPhone, which has long been the main driver of business growth, has been observed over the past few quarters, but thanks to the steady growth in the direction of services and sales of smart watches and headphones, Apple continues to be on the horse.
Let's start with the quarterly results. The reporting period brought Apple revenue of $ 64 billion. For comparison, a year ago, revenue was $ 62.9 billion, that is, last year’s record was improved by 2%. Gross margin fell 30 basis points, from 38.3% to 38.0%. At the same time, the gross margin for products amounted to 31.6%, and for services – 64.1%. Operating profit fell from $ 16.1 billion to $ 15.6 billion, while net income fell from $ 14.1 billion to $ 13.7 billion. Apple's Board of Directors announced a dividend of $ 0.77 per share. Dividends will be paid on November 14, 2019 to existing shareholders at the close of the register at the end of the day on November 11, 2019. 60% is the share of international sales in Apple's total revenue structure. If in both Americas (north and south) Apple managed to increase sales (from $ 27.52 billion to $ 29.32 billion), as well as in parts of the Asia-Pacific region (from $ 3.43 billion to $ 3.66 billion), then in In Europe, China, and Japan, revenues, by contrast, declined. In China, Apple’s second largest market, sales fell from $ 11.41 billion to $ 11.13 billion.
If we separate revenue from sales of devices, it decreased from $ 52.3 billion to $ 51.5 billion. But the decline was offset by Services, which increased revenue from $ 10.6 billion to $ 12.5 billion, which is a new absolute record. Now Apple’s service business in terms of turnover is comparable to Fortune 70 companies. This also includes revenue from repairing Apple equipment. Moreover, during a conference call with investors and journalists, it was said that the direction of AppleCare showed the best result. Now Apple has a total of more than 450 million paid subscribers, compared to 303 million a year ago, and in 2020 the company expects to add another 50 million, breaking the mark of 500 million paid subscribers.
IPhone smartphones for the quarter were sold at $ 33.4 billion compared to $ 36.8 billion a year earlier, Mac PC sales fell from $ 7.3 billion to $ 7 billion, and iPads grew from $ 3.98 billion to $ 4.7 billion. Wearable device sales. devices for home and accessories (the category Wearables, Home, and Accessories, which used to be called Other Products, which includes Watch smart watches, AirPods and Beats headphones, as well as other products) grew stronger than others – from $ 4.2 to $ 6.5 billion , which is also a new record. That is, sales of Apple Watch and AirPods are almost equal to Mac sales. The turnover of the Apple Pay payment system and the number of transactions have more than doubled. In terms of transactions per quarter (over 3 billion), Apple Pay is already superior to PayPal. Worldwide, there are over 6,000 card issuers supporting Apple Pay. If we talk about the results of the year, all the main financial indicators decreased: revenue fell from $ 225.8 billion to $ 213.9 billion, operating profit fell from $ 70.9 billion to $ 63.9 billion, and net profit fell from $ 59.5 billion to $ 55. , 3 billion. According to the results of the year, sales fell only on iPhone smartphones – $ 164.9 billion to $ 142.4 billion, while other categories of devices and services showed growth: Mac – from $ 25.2 billion to $ 25.7 billion, iPad – from $ 18.4 billion to $ 21.3 billion, wearable electronics and accessories – from $ 17.4 billion to 24.5 billion, and services – from $ 39.7 billion to $ 46.3 billion. As of September 28, 2019, the amount of cash on Apple accounts amounted to an impressive $ 205.9 billion (2% less than a quarter earlier). In the first quarter of fiscal year 2020, which will be of particular interest, since this quarter is the most profitable (Christmas period and peak sales of new iPhones), Apple expects to generate revenue between $ 85.5- $ 89.5 billion, keeping gross margins at 37.5 % -38.5%. The stock market reacted positively to the publication of reports – at over-the-counter trading, Apple shares rose 2.57% to $ 248.19%.
Source: Apple and MacRumors