Revenue Grows 16 Percent and EPS Grows 30 Percent to New
March Quarter Records
New $100 Billion Share Repurchase Authorization Announced,
Dividend Raised by 16 Percent
Apple® today announced financial results for its fiscal 2018
second quarter ended March 31, 2018. The Company posted quarterly
revenue of $61.1 billion, an increase of 16 percent from the
year-ago quarter, and quarterly earnings per diluted share of
$2.73, up 30 percent. International sales accounted for 65 percent
of the quarter’s revenue.
“We’re thrilled to report our best March quarter ever, with
strong revenue growth in iPhone, Services and Wearables,” said Tim
Cook, Apple’s CEO. “Customers chose iPhone X more than any other
iPhone each week in the March quarter, just as they did following
its launch in the December quarter. We also grew revenue in all of
our geographic segments, with over 20% growth in Greater China and
Japan.”
“Our business performed extremely well during the March quarter,
as we grew earnings per share by 30 percent and generated over $15
billion in operating cash flow,” said Luca Maestri, Apple’s CFO.
“With the greater flexibility we now have from access to our global
cash, we can more efficiently invest in our US operations and work
toward a more optimal capital structure. Given our confidence in
Apple’s future, we are very happy to announce that our Board has
approved a new $100 billion share repurchase authorization and a 16
percent increase in our quarterly dividend.”
The Company will complete the execution of the previous $210
billion share repurchase authorization during the third fiscal
quarter.
Reflecting the approved increase, the Board has declared a cash
dividend of $0.73 per share of Apple’s common stock payable on May
17, 2018 to shareholders of record as of the close of business on
May 14, 2018.
The Company also expects to continue to net-share-settle vesting
restricted stock units.
From the inception of its capital return program in August 2012
through March 2018, Apple has returned $275 billion to
shareholders, including $200 billion in share repurchases. 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 2018
third quarter:
• revenue between $51.5 billion and $53.5 billion• gross margin
between 38 percent and 38.5 percent• operating expenses between
$7.7 billion and $7.8 billion• other income/(expense) of $400
million• tax rate of approximately 14.5 percent
Apple will provide live streaming of its Q2 2018 financial
results conference call beginning at 2:00 p.m. PDT on May 1, 2018
at www.apple.com/investor/earnings-call/. This webcast will also be
available for replay for approximately two weeks thereafter.
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 product introductions and
transitions, including delivering to the marketplace, and
stimulating customer demand for, new products, services and
technological innovations on a timely basis; the effect that
product introductions and transitions, changes in product pricing
and product mix, and increases in component and other costs 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 sole 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 service quality problems 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; war, terrorism,
public health issues, natural disasters, 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.
© 2018 Apple Inc. All rights reserved. Apple and the Apple logo
are trademarks of Apple. 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
31, 2018 April 1, 2017 March
31, 2018 April 1, 2017 Net sales $
61,137 $ 52,896 $ 149,430 $ 131,247 Cost of sales (1) 37,715
32,305 92,096 80,480 Gross margin 23,422
20,591 57,334 50,767 Operating expenses:
Research and development (1) 3,378 2,776 6,785 5,647 Selling,
general and administrative (1) 4,150 3,718 8,381
7,664 Total operating expenses 7,528 6,494
15,166 13,311 Operating income 15,894 14,097 42,168
37,456 Other income/(expense), net 274 587 1,030
1,408 Income before provision for income taxes 16,168 14,684
43,198 38,864 Provision for income taxes 2,346 3,655
9,311 9,944 Net income $ 13,822 $ 11,029 $
33,887 $ 28,920 Earnings per share: Basic $ 2.75 $
2.11 $ 6.69 $ 5.50 Diluted $ 2.73 $ 2.10 $ 6.63 $ 5.46
Shares used in computing earnings per share: Basic 5,024,877
5,225,791 5,068,877 5,262,226 Diluted 5,068,493 5,261,688 5,113,140
5,294,841 Cash dividends declared per share $ 0.63 $ 0.57 $
1.26 $ 1.14 (1) Includes share-based compensation expense as
follows: Cost of sales $ 257 $ 217 $ 509 $ 446 Research and
development $ 666 $ 575 $ 1,312 $ 1,164 Selling, general and
administrative $ 425 $ 425 $ 823 $ 863
Apple Inc.CONDENSED CONSOLIDATED
BALANCE SHEETS (Unaudited)(In millions, except number of shares
which are reflected in thousands and par value)
March 31, 2018 September 30,
2017 ASSETS: Current assets: Cash and cash
equivalents $ 45,059 $ 20,289 Short-term marketable securities
42,881 53,892 Accounts receivable, less allowances of $60 and $58,
respectively 14,324 17,874 Inventories 7,662 4,855 Vendor non-trade
receivables 8,084 17,799 Other current assets 12,043 13,936
Total current assets 130,053 128,645 Long-term
marketable securities 179,286 194,714 Property, plant and
equipment, net 35,077 33,783 Other non-current assets 23,086
18,177 Total assets $ 367,502 $ 375,319
LIABILITIES AND SHAREHOLDERS’ EQUITY: Current liabilities:
Accounts payable $ 34,311 $ 49,049 Accrued expenses 26,756 25,744
Deferred revenue 7,775 7,548 Commercial paper 11,980 11,977 Current
portion of long-term debt 8,498 6,496 Total current
liabilities 89,320 100,814 Deferred revenue, non-current
3,087 2,836 Long-term debt 101,362 97,207 Other non-current
liabilities 46,855 40,415 Total liabilities 240,624
241,272 Commitments and contingencies
Shareholders’ equity: Common stock and additional paid-in capital,
$0.00001 par value: 12,600,000 shares authorized; 4,943,282 and
5,126,201 shares issued and outstanding, respectively 38,044 35,867
Retained earnings 91,898 98,330 Accumulated other comprehensive
income/(loss) (3,064 ) (150 ) Total shareholders’ equity 126,878
134,047 Total liabilities and shareholders’ equity $
367,502 $ 375,319
Apple Inc.CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited)(In millions)
Six Months Ended March 31, 2018
April 1, 2017 Cash and cash equivalents, beginning of
the period $ 20,289 $ 20,484 Operating activities:
Net income 33,887 28,920 Adjustments to reconcile net income to
cash generated by operating activities: Depreciation and
amortization 5,484 5,319 Share-based compensation expense 2,644
2,473 Deferred income tax expense/(benefit) (34,235 ) 2,822 Other
(151 ) (209 ) Changes in operating assets and liabilities: Accounts
receivable, net 3,523 4,183 Inventories (2,807 ) (778 ) Vendor
non-trade receivables 9,715 4,512 Other current and non-current
assets (1,053 ) (896 ) Accounts payable (13,220 ) (6,862 ) Deferred
revenue 478 (221 ) Other current and non-current liabilities 39,158
541 Cash generated by operating activities 43,423
39,804 Investing activities: Purchases of marketable
securities (48,449 ) (99,821 ) Proceeds from maturities of
marketable securities 31,884 12,429 Proceeds from sales of
marketable securities 38,942 60,454 Payments for acquisition of
property, plant and equipment (7,005 ) (6,309 ) Payments made in
connection with business acquisitions, net (305 ) (67 ) Other 53
(10 ) Cash generated by/(used in) investing activities
15,120 (33,324 ) Financing activities: Proceeds from
issuance of common stock 327 273 Payments for taxes related to net
share settlement of equity awards (1,190 ) (788 ) Payments for
dividends and dividend equivalents (6,529 ) (6,134 ) Repurchases of
common stock (32,851 ) (18,012 ) Proceeds from issuance of term
debt, net 6,969 10,975 Repayments of term debt (500 ) — Change in
commercial paper, net 1 1,879 Cash used in financing
activities (33,773 ) (11,807 ) Increase/(Decrease) in cash and cash
equivalents 24,770 (5,327 ) Cash and cash equivalents, end
of the period $ 45,059 $ 15,157 Supplemental cash
flow disclosure: Cash paid for income taxes, net $ 6,340 $ 6,878
Cash paid for interest $ 1,356 $ 1,007
Apple Inc.Q2 2018 Unaudited
Summary Data(Units in thousands, Revenue in millions)
Q2 2018 Q1 2018 Q2
2017 Sequential Change Year/Year Change
Reportable Segments Revenue
Revenue Revenue
Revenue Revenue Americas $
24,841 $ 35,193 $ 21,157 - 29 % 17 % Europe 13,846 21,054 12,733 -
34 % 9 % Greater China 13,024 17,956 10,726 - 27 % 21 % Japan 5,468
7,237 4,485 - 24 % 22 % Rest of Asia Pacific 3,958
6,853 3,795 - 42 % 4 %
Total Apple
$ 61,137 $ 88,293 $
52,896 - 31 % 16 %
Q2 2018 Q1 2018 Q2 2017
Sequential Change Year/Year Change Product
Summary Units Revenue
Units Revenue
Units Revenue
Units Revenue
Units Revenue iPhone (1)
52,217 $ 38,032 77,316 $ 61,576 50,763 $ 33,249 - 32 % - 38 % 3 %
14 % iPad (1) 9,113 4,113 13,170 5,862 8,922 3,889 - 31 % - 30 % 2
% 6 % Mac (1) 4,078 5,848 5,112 6,895 4,199 5,844 -20 % - 15 % - 3
% 0 % Services (2) 9,190 8,471 7,041 8 % 31 % Other Products (1)(3)
3,954 5,489 2,873 - 28 % 38 %
Total
Apple $ 61,137 $
88,293 $ 52,896 - 31 % 16
% (1) Includes deferrals and amortization of
related software upgrade rights and non-software services. (2)
Includes revenue from Digital Content and Services, AppleCare,
Apple Pay, licensing and other services. (3) Includes sales of
AirPods, Apple TV, Apple Watch, Beats products, HomePod, iPod touch
and other Apple-branded and third-party accessories.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180501006831/en/
ApplePress:Kristin Huguet,
408-974-2414khuguet@apple.comorInvestor Relations:Nancy Paxton,
408-974-5420paxton1@apple.comMatt Blake,
408-974-7406mattblake@apple.com
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