Revenue and EPS Hit New All-Time Records
Active Installed Base of Devices Reaches 1.3 Billion in
January
Apple® today announced financial results for its fiscal 2018
first quarter ended December 30, 2017. The Company posted quarterly
revenue of $88.3 billion, an increase of 13 percent from the
year-ago quarter and an all-time record, and quarterly earnings per
diluted share of $3.89, up 16 percent, also an all-time record.
International sales accounted for 65 percent of the quarter’s
revenue.
“We’re thrilled to report the biggest quarter in Apple’s
history, with broad-based growth that included the highest revenue
ever from a new iPhone lineup. iPhone X surpassed our expectations
and has been our top-selling iPhone every week since it shipped in
November,” said Tim Cook, Apple’s CEO. “We’ve also achieved a
significant milestone with our active installed base of devices
reaching 1.3 billion in January. That’s an increase of 30 percent
in just two years, which is a testament to the popularity of our
products and the loyalty and satisfaction of our customers.”
“Thanks to great operational and business performance, we
achieved all-time record profitability during the quarter, with EPS
up 16 percent,” said Luca Maestri, Apple’s CFO. “Cash flow from
operations was very strong at $28.3 billion, and we returned $14.5
billion to investors through our capital return program.”
Apple is providing the following guidance for its fiscal 2018
second quarter:
• revenue between $60 billion and $62 billion• gross margin
between 38 percent and 38.5 percent• operating expenses between
$7.6 billion and $7.7 billion• other income/(expense) of $300
million• tax rate of approximately 15 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
February 15, 2018 to shareholders of record as of the close of
business on February 12, 2018.
Apple will provide live streaming of its Q1 2018 financial
results conference call beginning at 2:00 p.m. PST on February 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 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 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 December 30, 2017
December 31, 2016 Net sales $ 88,293 $ 78,351
Cost of sales (1) 54,381 48,175 Gross margin 33,912 30,176
Operating expenses: Research and development (1) 3,407 2,871
Selling, general and administrative (1) 4,231 3,946 Total operating
expenses 7,638 6,817 Operating income 26,274 23,359 Other
income/(expense), net 756 821 Income before provision for income
taxes 27,030 24,180 Provision for income taxes 6,965 6,289 Net
income $ 20,065 $ 17,891 Earnings per share: Basic $ 3.92 $
3.38 Diluted $ 3.89 $ 3.36 Shares used in computing earnings
per share: Basic 5,112,877 5,298,661 Diluted 5,157,787 5,327,995
Cash dividends declared per share $ 0.63 $ 0.57 (1)
Includes share-based compensation expense as follows: Cost of sales
$ 252 $ 229 Research and development $ 646 $ 589 Selling, general
and administrative $ 398 $ 438
Apple Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions, except number of shares
which are reflected in thousands and par value)
December 30, 2017 September 30,
2017 ASSETS: Current assets: Cash and cash
equivalents $ 27,491 $ 20,289 Short-term marketable securities
49,662 53,892 Accounts receivable, less allowances of $59 and $58,
respectively 23,440 17,874 Inventories 4,421 4,855 Vendor non-trade
receivables 27,459 17,799 Other current assets 11,337 13,936
Total current assets 143,810 128,645 Long-term
marketable securities 207,944 194,714 Property, plant and
equipment, net 33,679 33,783 Goodwill 5,889 5,717 Acquired
intangible assets, net 2,149 2,298 Other non-current assets 13,323
10,162 Total assets $ 406,794 $ 375,319
LIABILITIES AND SHAREHOLDERS’ EQUITY: Current
liabilities: Accounts payable $ 62,985 $ 49,049 Accrued expenses
26,281 25,744 Deferred revenue 8,044 7,548 Commercial paper 11,980
11,977 Current portion of long-term debt 6,498 6,496
Total current liabilities 115,788 100,814 Deferred revenue,
non-current 3,131 2,836 Long-term debt 103,922 97,207 Other
non-current liabilities 43,754 40,415 Total
liabilities 266,595 241,272 Commitments and
contingencies Shareholders’ equity: Common stock and
additional paid-in capital, $0.00001 par value: 12,600,000 shares
authorized; 5,081,651 and 5,126,201 shares issued and outstanding,
respectively 36,447 35,867 Retained earnings 104,593 98,330
Accumulated other comprehensive income/(loss) (841 ) (150 ) Total
shareholders’ equity 140,199 134,047 Total
liabilities and shareholders’ equity $ 406,794 $ 375,319
Apple Inc.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (Unaudited)
(In millions)
Three Months Ended December 30, 2017
December 31, 2016 Cash and cash equivalents,
beginning of the period $ 20,289 $ 20,484 Operating
activities: Net income 20,065 17,891 Adjustments to reconcile net
income to cash generated by operating activities: Depreciation and
amortization 2,745 2,987 Share-based compensation expense 1,296
1,256 Deferred income tax expense/(benefit) (33,737 ) 1,452 Other
(11 ) (274 ) Changes in operating assets and liabilities: Accounts
receivable, net (5,570 ) 1,697 Inventories 434 (580 ) Vendor
non-trade receivables (9,660 ) (375 ) Other current and non-current
assets (197 ) (1,446 ) Accounts payable 14,588 2,460 Deferred
revenue 791 42 Other current and non-current liabilities 37,549
2,124 Cash generated by operating activities 28,293
27,234 Investing activities: Purchases of marketable
securities (41,272 ) (54,272 ) Proceeds from maturities of
marketable securities 14,048 6,525 Proceeds from sales of
marketable securities 16,801 32,166 Payments made in connection
with business acquisitions, net (173 ) (17 ) Payments for
acquisition of property, plant and equipment (2,810 ) (3,334 )
Payments for acquisition of intangible assets (154 ) (86 ) Payments
for strategic investments, net (94 ) — Other 64 (104 ) Cash
used in investing activities (13,590 ) (19,122 ) Financing
activities: Payments for taxes related to net share settlement of
equity awards (1,038 ) (629 ) Payments for dividends and dividend
equivalents (3,339 ) (3,130 ) Repurchases of common stock (10,095 )
(10,851 ) Proceeds from issuance of term debt, net 6,969 — Change
in commercial paper, net 2 2,385 Cash used in
financing activities (7,501 ) (12,225 ) Increase/(Decrease) in cash
and cash equivalents 7,202 (4,113 ) Cash and cash
equivalents, end of the period $ 27,491 $ 16,371
Supplemental cash flow disclosure: Cash paid for income taxes, net
$ 3,551 $ 3,510 Cash paid for interest $ 623 $ 497
Apple
Inc. Q1 2018 Unaudited Summary Data (Units in thousands,
Revenue in millions)
Q1
2018 Q4 2017 Q1 2017 Sequential Change
Year/Year Change Reportable Segments
Revenue Revenue
Revenue Revenue
Revenue Americas $35,193 $23,099 $31,968 52%
10% Europe 21,054 13,009 18,521 62% 14% Greater China 17,956 9,801
16,233 83% 11% Japan 7,237 3,858 5,766 88% 26% Rest of Asia Pacific
6,853 2,812 5,863 144% 17%
Total Apple
$88,293 $52,579 $78,351 68% 13%
Q1 2018 Q4 2017 Q1
2017 Sequential Change Year/Year Change
Product Summary Units
Revenue Units
Revenue Units
Revenue Units
Revenue Units
Revenue iPhone (1) 77,316 $61,576 46,677
$28,846 78,290 $54,378 66% 113% - 1% 13% iPad (1) 13,170 5,862
10,326 4,831 13,081 5,533 28% 21% 1% 6% Mac (1) 5,112 6,895 5,386
7,170 5,374 7,244 -5% - 4% - 5% - 5% Services (2) 8,471 8,501 7,172
0% 18% Other Products (1)(3) 5,489 3,231 4,024 70% 36%
Total
Apple $88,293 $52,579
$78,351 68% 13%
(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/20180201006492/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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