Revenue Up 12 Percent and EPS Up 24 Percent to New September
Quarter Records
Services Revenue Reaches All-Time High
Apple® today announced financial results for its fiscal 2017
fourth quarter ended September 30, 2017. The Company posted
quarterly revenue of $52.6 billion, an increase of 12 percent from
the year-ago quarter, and quarterly earnings per diluted share of
$2.07, up 24 percent. International sales accounted for 62 percent
of the quarter’s revenue.
“We’re happy to report a very strong finish to a great fiscal
2017, with record fourth quarter revenue, year-over-year growth for
all our product categories, and our best quarter ever for
Services,” said Tim Cook, Apple’s CEO. “With fantastic new products
including iPhone 8 and iPhone 8 Plus, Apple Watch Series 3, and
Apple TV 4K joining our product lineup, we’re looking forward to a
great holiday season, and with the launch of iPhone X getting
underway right now, we couldn’t be more excited as we begin to
deliver our vision for the future with this stunning device.”
“Apple’s year-over-year revenue growth rate accelerated for the
fourth consecutive quarter and drove EPS growth of 24 percent in
the September quarter,” said Luca Maestri, Apple’s CFO. “We also
generated strong operating cash flow of $15.7 billion and returned
$11 billion to investors through our capital return program.”
Apple is providing the following guidance for its fiscal 2018
first quarter:
• revenue between $84 billion and $87 billion• gross margin
between 38 percent and 38.5 percent• operating expenses between
$7.65 billion and $7.75 billion• other income/(expense) of $600
million• tax rate of 25.5 percent
Apple’s board of directors has declared a cash dividend of $0.63
per share of the Company’s common stock. The dividend is payable on
November 16, 2017 to shareholders of record as of the close of
business on November 13, 2017.
Apple will provide live streaming of its Q4 2017 financial
results conference call beginning at 2:00 p.m. PDT on November 2,
2017 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 U.S. 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 the Apple
Newsroom (www.apple.com/newsroom), or call Apple’s Media Helpline
at (408) 974-2042.
© 2017 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 Twelve Months Ended
September 30, 2017
September 24, 2016
September 30, 2017
September 24, 2016
Net sales $ 52,579 $ 46,852 $ 229,234 $ 215,639 Cost of sales (1)
32,648 29,039 141,048 131,376 Gross margin 19,931 17,813 88,186
84,263 Operating expenses: Research and development (1)
2,997 2,570 11,581 10,045 Selling, general and administrative (1)
3,814 3,482 15,261 14,194 Total operating expenses 6,811 6,052
26,842 24,239 Operating income 13,120 11,761 61,344 60,024
Other income/(expense), net 797 427 2,745 1,348 Income before
provision for income taxes 13,917 12,188 64,089 61,372 Provision
for income taxes 3,203 3,174 15,738 15,685 Net income $ 10,714 $
9,014 $ 48,351 $ 45,687 Earnings per share: Basic $ 2.08 $
1.68 $ 9.27 $ 8.35 Diluted $ 2.07 $ 1.67 $ 9.21 $ 8.31
Shares used in computing earnings per share: Basic 5,149,428
5,366,912 5,217,242 5,470,820 Diluted 5,183,585 5,393,333 5,251,692
5,500,281 Cash dividends declared per share $ 0.63 $ 0.57 $
2.40 $ 2.18 (1) Includes share-based compensation expense as
follows: Cost of sales $ 215 $ 186 $ 877 $ 769 Research and
development $ 569 $ 476 $ 2,299 $ 1,889 Selling, general and
administrative $ 390 $ 368 $ 1,664 $ 1,552
Apple Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions, except number of shares
which are reflected in thousands and par value)
September 30, 2017
September 24, 2016
ASSETS: Current assets: Cash and cash equivalents $ 20,289 $
20,484 Short-term marketable securities 53,892 46,671 Accounts
receivable, less allowances of $58 and $53, respectively 17,874
15,754 Inventories 4,855 2,132 Vendor non-trade receivables 17,799
13,545 Other current assets 13,936 8,283 Total current
assets 128,645 106,869 Long-term marketable securities
194,714 170,430 Property, plant and equipment, net 33,783 27,010
Goodwill 5,717 5,414 Acquired intangible assets, net 2,298 3,206
Other non-current assets 10,162 8,757 Total assets $ 375,319
$ 321,686
LIABILITIES AND SHAREHOLDERS’
EQUITY: Current liabilities: Accounts payable $ 49,049 $ 37,294
Accrued expenses 25,744 22,027 Deferred revenue 7,548 8,080
Commercial paper 11,977 8,105 Current portion of long-term debt
6,496 3,500 Total current liabilities 100,814 79,006
Deferred revenue, non-current 2,836 2,930 Long-term debt 97,207
75,427 Other non-current liabilities 40,415 36,074 Total
liabilities 241,272 193,437 Commitments and
contingencies Shareholders’ equity: Common stock and
additional paid-in capital, $0.00001 par value: 12,600,000 shares
authorized; 5,126,201 and 5,336,166 shares issued and outstanding,
respectively 35,867 31,251 Retained earnings 98,330 96,364
Accumulated other comprehensive income/(loss) (150 ) 634 Total
shareholders’ equity 134,047 128,249 Total liabilities and
shareholders’ equity $ 375,319 $ 321,686
Apple Inc.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (Unaudited)
(In millions)
Twelve Months Ended September 30, 2017
September 24, 2016 Cash and cash equivalents,
beginning of the period $ 20,484 $ 21,120 Operating
activities: Net income 48,351 45,687 Adjustments to reconcile net
income to cash generated by operating activities: Depreciation and
amortization 10,157 10,505 Share-based compensation expense 4,840
4,210 Deferred income tax expense 5,966 4,938 Other (166 ) 486
Changes in operating assets and liabilities: Accounts receivable,
net (2,093 ) 527 Inventories (2,723 ) 217 Vendor non-trade
receivables (4,254 ) (51 ) Other current and non-current assets
(5,318 ) 1,055 Accounts payable 9,618 1,837 Deferred revenue (626 )
(1,554 ) Other current and non-current liabilities (154 ) (2,033 )
Cash generated by operating activities 63,598 65,824
Investing activities: Purchases of marketable securities (159,486 )
(142,428 ) Proceeds from maturities of marketable securities 31,775
21,258 Proceeds from sales of marketable securities 94,564 90,536
Payments made in connection with business acquisitions, net (329 )
(297 ) Payments for acquisition of property, plant and equipment
(12,451 ) (12,734 ) Payments for acquisition of intangible assets
(344 ) (814 ) Payments for strategic investments, net (395 ) (1,388
) Other 220 (110 ) Cash used in investing activities (46,446
) (45,977 ) Financing activities: Proceeds from issuance of common
stock 555 495 Excess tax benefits from equity awards 627 407
Payments for taxes related to net share settlement of equity awards
(1,874 ) (1,570 ) Payments for dividends and dividend equivalents
(12,769 ) (12,150 ) Repurchases of common stock (32,900 ) (29,722 )
Proceeds from issuance of term debt, net 28,662 24,954 Repayments
of term debt (3,500 ) (2,500 ) Change in commercial paper, net
3,852 (397 ) Cash used in financing activities (17,347 )
(20,483 ) Increase/(Decrease) in cash and cash equivalents (195 )
(636 ) Cash and cash equivalents, end of the period $ 20,289
$ 20,484 Supplemental cash flow disclosure: Cash paid for
income taxes, net $ 11,591 $ 10,444 Cash paid for interest $ 2,092
$ 1,316
Apple Inc. Q4 2017 Unaudited Summary
Data (Units in thousands, Revenue in millions)
Q4 2017 Q3 2017 Q4 2016 Sequential
Change Year/Year Change Operating Segments
Revenue Revenue
Revenue Revenue
Revenue Americas $23,099 $20,376 $20,229 13%
14% Europe 13,009 10,675 10,842 22% 20% Greater China 9,801 8,004
8,785 22% 12% Japan 3,858 3,624 4,324 6% - 11% Rest of Asia Pacific
2,812 2,729 2,672 3% 5%
Total Apple
$52,579 $45,408 $46,852 16% 12%
Q4 2017 Q3 2017 Q4
2016 Sequential Change Year/Year Change
Product Summary Units
Revenue Units
Revenue Units
Revenue Units
Revenue Units
Revenue iPhone (1) 46,677 $28,846 41,026
$24,846 45,513 $28,160 14% 16% 3% 2% iPad (1) 10,326 4,831 11,424
4,969 9,267 4,255 - 10% - 3% 11% 14% Mac (1) 5,386 7,170 4,292
5,592 4,886 5,739 25% 28% 10% 25% Services (2) 8,501 7,266 6,325
17% 34% Other Products (1)(3) 3,231 2,735 2,373 18% 36%
Total
Apple $52,579 $45,408
$46,852 16% 12%
(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.
Services revenue in the fourth quarter of 2017 included a favorable
one-time adjustment of $640 million due to a change in estimate
based on the availability of additional supporting information.
(3)
Includes sales of Apple TV, Apple Watch,
Beats products, iPod touch and Apple-branded and third-party
accessories.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171102006728/en/
ApplePress:Kristin Huguet,
408-974-2414khuguet@apple.comorInvestor Relations:Nancy Paxton,
408-974-5420paxton1@apple.comJoan Hoover,
408-974-4570hoover1@apple.com
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