Services Revenue Reaches New All-Time High of $11.5
Billion
Apple® today announced financial results for its fiscal 2019
second quarter ended March 30, 2019. The Company posted quarterly
revenue of $58 billion, a decline of 5 percent from the year-ago
quarter, and quarterly earnings per diluted share of $2.46, down 10
percent. International sales accounted for 61 percent of the
quarter’s revenue.
“Our March quarter results show the continued strength of our
installed base of over 1.4 billion active devices, as we set an
all-time record for Services, and the strong momentum of our
Wearables, Home and Accessories category, which set a new March
quarter record,” said Tim Cook, Apple’s CEO. “We delivered our
strongest iPad growth in six years, and we are as excited as ever
about our pipeline of innovative hardware, software and services.
We’re looking forward to sharing more with developers and customers
at Apple’s 30th annual Worldwide Developers Conference in
June.”
“We generated operating cash flow of $11.2 billion in the March
quarter and continued to make significant investments in all areas
of our business,” said Luca Maestri, Apple’s CFO. “We also returned
over $27 billion to shareholders through share repurchases and
dividends. Given our confidence in Apple’s future and the value we
see in our stock, our Board has authorized an additional $75
billion for share repurchases. We are also raising our quarterly
dividend for the seventh time in less than seven years.”
Reflecting the approved increase, Apple’s board of directors has
declared a cash dividend of $0.77 per share of the Company’s common
stock, an increase of 5 percent. The dividend is payable on May 16,
2019 to shareholders of record as of the close of business on May
13, 2019.
The management team and the Board will continue to review each
element of the capital return program regularly and plan to provide
an update on the program on an annual basis.
Apple is providing the following guidance for its fiscal 2019
third quarter:
• revenue between $52.5 billion and $54.5 billion• gross margin
between 37 percent and 38 percent• operating expenses between $8.7
billion and $8.8 billion• other income/(expense) of $250 million•
tax rate of approximately 16.5 percent
Apple will provide live streaming of its Q2 2019 financial
results conference call beginning at 2:00 p.m. PDT on April 30,
2019 at www.apple.com/investor/earnings-call/. This webcast will
also be available for replay for approximately two weeks
thereafter.
Apple periodically provides information for investors on its
corporate website, apple.com, and its investors relations website,
investor.apple.com. This includes press releases and other
information about financial performance, reports filed or furnished
with the SEC, information on corporate governance and details
related to its annual meeting of shareholders.
This press release contains forward-looking statements, within
the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements include without limitation
those about the Company’s estimated revenue, gross margin,
operating expenses, other income/(expense), tax rate, and plans for
return of capital. These statements involve risks and
uncertainties, and actual results may differ. Risks and
uncertainties include without limitation: the effect of global and
regional economic conditions on the Company's business, including
effects on purchasing decisions by consumers and businesses; the
ability of the Company to compete in markets that are highly
competitive and subject to rapid technological change; the ability
of the Company to manage frequent introductions and transitions of
products and services, including delivering to the marketplace, and
stimulating customer demand for, new products, services and
technological innovations on a timely basis; the effect that shifts
in the mix of products and services and in the geographic, currency
or channel mix, component cost increases, increases in the cost of
acquiring and delivering content for the Company’s services, price
competition, or the introduction of new products or services,
including new products or services with higher cost structures,
could have on the Company’s gross margin; the dependency of the
Company on the performance of distributors of the Company's
products, including cellular network carriers and other resellers;
the inventory and other asset risks associated with the Company’s
need to order, or commit to order, product components in advance of
customer orders; the continued availability on acceptable terms, or
at all, of certain components, services and new technologies
essential to the Company's business, including components and
technologies that may only be available from single or limited
sources; the dependency of the Company on manufacturing and
logistics services provided by third parties, many of which are
located outside of the US and which may affect the quality,
quantity or cost of products manufactured or services rendered to
the Company; the effect of product and services design and
manufacturing defects on the Company’s financial performance and
reputation; the dependency of the Company on third-party
intellectual property and digital content, which may not be
available to the Company on commercially reasonable terms or at
all; the dependency of the Company on support from third-party
software developers to develop and maintain software applications
and services for the Company’s products; the impact of unfavorable
legal proceedings, such as a potential finding that the Company has
infringed on the intellectual property rights of others; the impact
of changes to laws and regulations that affect the Company’s
activities, including the Company’s ability to offer products or
services to customers in different regions; the ability of the
Company to manage risks associated with its international
activities, including complying with laws and regulations affecting
the Company’s international operations; the ability of the Company
to manage risks associated with the Company’s retail stores; the
ability of the Company to manage risks associated with the
Company’s investments in new business strategies and acquisitions;
the impact on the Company's business and reputation from
information technology system failures, network disruptions or
losses or unauthorized access to, or release of, confidential
information; the ability of the Company to comply with laws and
regulations regarding data protection; the continued service and
availability of key executives and employees; political events,
international trade disputes, war, terrorism, natural disasters,
public health issues, and other business interruptions that could
disrupt supply or delivery of, or demand for, the Company’s
products; financial risks, including risks relating to currency
fluctuations, credit risks and fluctuations in the market value of
the Company’s investment portfolio; and changes in tax rates and
exposure to additional tax liabilities. More information on these
risks and other potential factors that could affect the Company’s
financial results is included in the Company’s filings with the
SEC, including in the “Risk Factors” and “Management’s Discussion
and Analysis of Financial Condition and Results of Operations”
sections of the Company’s most recently filed periodic reports on
Form 10-K and Form 10-Q and subsequent filings. The Company assumes
no obligation to update any forward-looking statements or
information, which speak as of their respective dates.
Apple revolutionized personal technology with the introduction
of the Macintosh in 1984. Today, Apple leads the world in
innovation with iPhone, iPad, Mac, Apple Watch and Apple TV.
Apple’s four software platforms — iOS, macOS, watchOS and tvOS —
provide seamless experiences across all Apple devices and empower
people with breakthrough services including the App Store, Apple
Music, Apple Pay and iCloud. Apple’s more than 100,000 employees
are dedicated to making the best products on earth, and to leaving
the world better than we found it.
NOTE TO EDITORS: For additional information visit Apple Newsroom
(www.apple.com/newsroom), or call Apple’s Media Helpline at (408)
974-2042.
© 2019 Apple Inc. All rights reserved. Apple and the Apple logo
are trademarks of Apple Inc. Other company and product names may be
trademarks of their respective owners.
Apple Inc. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (Unaudited) (In millions, except
number of shares which are reflected in thousands and per share
amounts) Three Months Ended Six Months
Ended March 30, 2019 March 31,
2018 March 30, 2019 March 31,
2018 Net sales: Products $ 46,565 $ 51,287 $ 120,000 $
130,451 Services 11,450 9,850 22,325 18,979
Total net sales (1) 58,015 61,137 142,325 149,430 Cost of sales:
Products 32,047 33,936 80,285 84,511 Services 4,147 3,779
8,188 7,585 Total cost of sales 36,194 37,715
88,473 92,096 Gross margin 21,821 23,422
53,852 57,334 Operating expenses: Research and
development 3,948 3,378 7,850 6,785 Selling, general and
administrative 4,458 4,150 9,241 8,381 Total
operating expenses 8,406 7,528 17,091 15,166
Operating income 13,415 15,894 36,761 42,168 Other
income/(expense), net 378 274 938 1,030 Income
before provision for income taxes 13,793 16,168 37,699 43,198
Provision for income taxes 2,232 2,346 6,173
9,311 Net income $ 11,561 $ 13,822 $ 31,526 $
33,887 Earnings per share: Basic $ 2.47 $ 2.75 $ 6.70 $ 6.69
Diluted $ 2.46 $ 2.73 $ 6.66 $ 6.63 Shares used in computing
earnings per share: Basic 4,674,071 5,024,877 4,704,945 5,068,877
Diluted 4,700,646 5,068,493 4,736,949 5,113,140 (1) Net
sales by reportable segment: Americas $ 25,596 $ 24,841 $ 62,536 $
60,034 Europe 13,054 13,846 33,417 34,900 Greater China 10,218
13,024 23,387 30,980 Japan 5,532 5,468 12,442 12,705 Rest of Asia
Pacific 3,615 3,958 10,543 10,811 Total net
sales $ 58,015 $ 61,137 $ 142,325 $ 149,430
(1) Net sales by category: iPhone $ 31,051 $ 37,559 $ 83,033
$ 98,663 Mac 5,513 5,776 12,929 12,600 iPad 4,872 4,008 11,601
9,763 Wearables, Home and Accessories 5,129 3,944 12,437 9,425
Services 11,450 9,850 22,325 18,979 Total net
sales $ 58,015 $ 61,137 $ 142,325 $ 149,430
Apple Inc. CONDENSED CONSOLIDATED
BALANCE SHEETS (Unaudited) (In millions, except number of
shares which are reflected in thousands and par value)
March 30, 2019 September 29, 2018
ASSETS: Current assets: Cash and cash equivalents $ 37,988 $
25,913 Marketable securities 42,104 40,388 Accounts receivable, net
15,085 23,186 Inventories 4,884 3,956 Vendor non-trade receivables
11,193 25,809 Other current assets 12,092 12,087
Total current assets 123,346 131,339 Non-current assets:
Marketable securities 145,319 170,799 Property, plant and
equipment, net 38,746 41,304 Other non-current assets 34,587
22,283 Total non-current assets 218,652 234,386
Total assets $ 341,998 $ 365,725
LIABILITIES AND SHAREHOLDERS’ EQUITY: Current liabilities:
Accounts payable $ 30,443 $ 55,888 Other current liabilities 35,368
33,327 Deferred revenue 5,532 5,966 Commercial paper 11,924 11,964
Term debt 10,505 8,784 Total current liabilities
93,772 115,929 Non-current liabilities: Term debt 90,201
93,735 Other non-current liabilities 52,165 48,914
Total non-current liabilities 142,366 142,649 Total
liabilities 236,138 258,578 Commitments and
contingencies Shareholders’ equity: Common stock and
additional paid-in capital, $0.00001 par value: 12,600,000 shares
authorized; 4,607,284 and 4,754,986 shares issued and outstanding,
respectively 42,801 40,201 Retained earnings 64,558 70,400
Accumulated other comprehensive income/(loss) (1,499 ) (3,454 )
Total shareholders’ equity 105,860 107,147 Total
liabilities and shareholders’ equity $ 341,998 $ 365,725
Apple Inc. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited) (In millions)
Six Months Ended March 30, 2019
March 31, 2018 Cash, cash equivalents and restricted
cash, beginning balances $ 25,913 $ 20,289 Operating
activities: Net income 31,526 33,887 Adjustments to reconcile net
income to cash generated by operating activities: Depreciation and
amortization 6,435 5,484 Share-based compensation expense 3,073
2,644 Deferred income tax benefit (124 ) (34,235 ) Other (215 )
(151 ) Changes in operating assets and liabilities: Accounts
receivable, net 8,094 3,523 Inventories (1,006 ) (2,807 ) Vendor
non-trade receivables 14,616 9,715 Other current and non-current
assets (717 ) (1,053 ) Accounts payable (20,024 ) (12,004 )
Deferred revenue (540 ) 394 Other current and non-current
liabilities (3,273 ) 38,026 Cash generated by operating
activities 37,845 43,423 Investing activities:
Purchases of marketable securities (13,854 ) (48,449 ) Proceeds
from maturities of marketable securities 16,880 31,884 Proceeds
from sales of marketable securities 22,635 38,942 Payments for
acquisition of property, plant and equipment (5,718 ) (7,005 )
Payments made in connection with business acquisitions, net (291 )
(305 ) Purchases of non-marketable securities (490 ) (163 ) Other
30 216 Cash generated by investing activities 19,192
15,120 Financing activities: Proceeds from issuance
of common stock 390 327 Payments for taxes related to net share
settlement of equity awards (1,427 ) (1,190 ) Payments for
dividends and dividend equivalents (7,011 ) (6,529 ) Repurchases of
common stock (32,498 ) (32,851 ) Proceeds from issuance of term
debt, net — 6,969 Repayments of term debt (2,500 ) (500 ) Other (87
) 1 Cash used in financing activities (43,133 ) (33,773 )
Increase in cash, cash equivalents and restricted cash 13,904
24,770 Cash, cash equivalents and restricted cash,
ending balances $ 39,817 $ 45,059 Supplemental cash
flow disclosure: Cash paid for income taxes, net $ 9,497 $ 6,340
Cash paid for interest $ 1,762 $ 1,356
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190430006149/en/
ApplePress Contact:Kristin Huguet, (408)
974-2414khuguet@apple.comInvestor Relations Contacts:Nancy
Paxton, (408) 974-5420paxton1@apple.comMatt Blake, (408)
974-7406mattblake@apple.com
Apple (NASDAQ:AAPL)
Historical Stock Chart
From Mar 2024 to Apr 2024
Apple (NASDAQ:AAPL)
Historical Stock Chart
From Apr 2023 to Apr 2024
