Apple (NASDAQ: AAPL) started the month off right with a strong earnings report on November 1 for its fiscal fourth quarter ended September 28, 2018. Among the highlights are quarterly revenue of $62.9 billion, a 20 percent increase year-over-year, and quarterly earnings per diluted share of $2.91, representing a 41 percent increase over earnings for the same period last year. International sales made up 61 percent of revenue for the quarter. Of particular note was the company’s Services revenue which hit an all-time high of $10 billion, an increase of $2.1 billion, or 27 percent, over the same period last year.
“We’re thrilled to report another record-breaking quarter that caps a tremendous fiscal 2018, the year in which we shipped our 2 billionth iOS device, celebrated the 10th anniversary of the App Store and achieved the strongest revenue and earnings in Apple’s history,” said Apple CEO Tim Cook in a November 1 news release. “Over the past two months, we’ve delivered huge advancements for our customers through new versions of iPhone, Apple Watch, iPad and Mac as well as our four operating systems, and we enter the holiday season with our strongest lineup of products and services ever.”
“We set new Q4 records in all of our geographic segments and new all-time revenue records for the App Store, cloud services, AppleCare, Apple Music and Apple Pay,” said Cook on the earnings call, transcribed by Seeking Alpha. “We also continued to see strong growth in paid subscriptions reaching over 330 million in our ecosystem.”
Cook also highlighted that he considers Apple Pay to be the number one mobile contactless payment service globally, nothing that transaction volume tripled compared to the same period last year. Costco’s rollout of Apple Pay to more than 500 U.S. warehouses likely contributed to that new volume.
“I’d like to thank all of our employees, customers, developers, and business partners for helping us deliver outstanding results across our fiscal 2018. We are headed into the holidays with our strongest product lineup ever, and we could not be more bullish about Apple’s future,” Cook added.
Other highlights for the quarter included:
- $27.5 billion in revenue came from customers based in the Americas, followed by $15.4 billion from Europe, $11.4 from Greater China, $5.2 billion in Japan and $3.4 from the rest of the Asia Pacific region.
- The company reported total operating expenses of $8.0 billion.
- Apple reported net income of $14.1 billion, or earnings of $2.91 per diluted share.
- Apple declared a dividend of $0.73 per share of common stock, payable on November 15 to shareholders of record as of November 12. Last year at this time, Apple declared a dividend of $0.63 per share.
Apple offered the following guidance for its first quarter of fiscal year 2019, which will include the 2018 holiday season:
- Revenue between $89 billion and $93 billion
- Other income of approximately $300 million
- Gross margin between 38 percent and 38.5 percent
- Operating expenses between $8.7 billion and $8.8 billion
Though Apple stock peaked at $222.22 per share on November 1, the day earnings were released, it has since dipped. As of 7:51 p.m. Eastern yesterday, Apple stock had dropped to $208.49 per share. It is still up overall since this time last year. On November 9, 2017, Apple stock was valued at $175.88.
Insider Take:
Apple had a stellar earnings report, but its stock price dropped 6.6 percent after the report, its most significant drop since January 2014. According to MarketWatch, while Apple’s results beat expectations, industry analysts were not impressed with the company’s forecast or the fact that Apple will no longer provide unit sales for iPhones, iPads, Mac and other hardware products as it currently does in its data summary report. The MarketWatch headline called this a “Houdini-like move.” Tim Long, an analyst for BMO Capital Markets, said the lack of transparency was disappointing.