Wednesday, 18 September, 2019

Apple posts Q2 earnings: Revenue hits $58 billion

The iPhone XR Is Apple's Real Star Apple's iPhone sales fall 17% in first quarter as flagship product struggles
Russell Knight | 01 May, 2019, 03:22

Apple is continuing to grapple with challenges it hasn't had to confront since iPhone debuted 12 years ago, catapulting the company on to a head-spinning trajectory.

Apple has unveiled a second successive decline in revenues and profits as iPhone sales continued to fall amid a waning global smartphone market. Revenue from Services checked in at $11.5 billion, setting an all-time quarterly record in the process.

The iPhone still accounts for 54 percent of Apple's business, but that's declining. It didn't take too long after that, though, for the China situation to grow dire, culminating in an unheard-of investor update about weak iPhone sales and dramatic dip in first-quarter revenue - the last time that happened was in the winter of 2000.

For its fiscal second quarter ended in March, Apple reported revenue of $58.02 billion, above analysts' average estimate of $57.37 billion, according to Refinitiv data. Cook did not break down that subscriber number, but as of last quarter, Apple Music had 50 million paid subscribers. Apple is counting on that growth to make up for the iPhone's decline. "We're looking forward to sharing more with developers and customers at Apple's 30th annual Worldwide Developers Conference in June". During that quarter Apple sold 52.2 million iPhones, 9.1 million iPads, and 4.1 million Macs. Cook also said he is "optimistic" that the United States and China will soon reach a trade deal. Apple adjusted the prices of iPhones, and the Chinese government reduced sales taxes, which spurred more sales. There we can see that iPhone was responsible for over $31 billion, or about 53 percent of Apple's total quarterly revenues. "Our trade-in and financing programs that we implemented in our retail stores have been very well-received there". "We feel a lot better than we did 90 days ago".

During the quarter, iPhone sales fell 17pc to $31bn, while sales of services were up 16pc at $11.5bn.

Highlighting the renewed focus on services, an entire Apple press event last month focused only on new services, including Apple TV Plus, Apple News Plus and its Apple Arcade gaming service, which all require a subscription. It also was the highest growth rate for the device in six years.

Apple Pay transactions doubled year-over-year, Cook said, and Apple expects more people to use it as American transit systems (including New York City's MTA) start supporting contactless payments.

Saudi Arabia will stick to global oil deal, pact could be extended
Washington reimposed sanctions on Iran's oil exports in November following the USA withdrawal from a 2015 nuclear accord. The Saudis face a tricky task to balance the market and help revive their economy while fielding U.S.

Pelosi, Schumer Pitch Trump on Spendy, Protectionist Infrastructure Package
House Speaker Nancy Pelosi said "it's about jobs, jobs, jobs" and agreed that the plan should be "big and bold". A top five-cable network, FNC has been the most watched news channel in the country for 17 consecutive years.

Google Q1 revenues $36.3 billion but miss Wall Street expectations
Google CEO Sundar Pichai reiterated those remarks, saying that the entire industry was facing "year-on-year headwinds". If you were hoping Google would divulge its cloud revenue you'll just have to wait for a more "appropriate time".

Services revenue wasn't the only strong point in Apple's smaller business lines.

Cook avoided saying much about the settlement, saying: "We're glad to put the litigation behind us".

Some notable tidbits from the earnings conference call include the fact that Apple's Wearables business is now the size of a Fortune 200 company.

Wearables include the Airpods wireless headphones and the Apple Watch.

"Demand has been incredible", Cook said.

The good news for Apple: Despite declining iPhone sales, accurate guidance for the quarter has Wall Street feeling upbeat about the company's prospects. Apple's stock gained almost 5% to $210.50 in after-hours trading.

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