I’m in Tiffin, Ohio heading back to Vermont and I promised Emily that I would write about Apple’s financial results for Kibbles & Bytes. We have had an awesome trip so far and it was even better on Tuesday when I saw Apple’s quarterly results.
The analysts were pretty much gloom and doom and expected Apple to struggle to even meet their guidance for the quarter. But Apple once again beat the street by posting revenue of $42.4 billion and net quarterly profit of $7.8 billion, or $1.42 per diluted share, compared to revenue of $49.6 billion and net quarterly profit of $10.7 billion, or $1.85 per diluted share, in the year-ago quarter. Although the drop in revenues was expected and predicted by Apple, Apple posted both top line and bottom line revenues that exceeded their guidance and analysts’ expectations.
Their guidance for the 4th quarter (July to September) was also stronger than expected with revenue between $45.5 billion and $47.5 billion and gross margin between 37.5 percent and 38 percent. In addition, the Apple board of directors declared a cash dividend of $0.57 per share of Apple’s common stock.
While iPhone and Mac sales continued to slump, mostly due to the lack of new models, iPhone sales were strong, with the iPhone 5se leading the way. iPad revenue took a positive turn up 7% driven by the iPad Pro although unit sales were down. Services revenue was the highest ever and a bright star in the report at just about $6 billion which is up 19% year over year. Services revenue is growing and Tim Cook said he expected services revenue alone to be the size of a Fortune 100 company. Caterpillar, Coca-Cola and Archer Daniels Midland are all at the bottom of that list and if Apple sustains the pace at $6 billion a quarter they will easily make it.
Apple invested $1 billion in Didi Chuxing during the quarter and has cash on-hand of $231.5 billion. The market reacted favorably and pushed Apple up by 7% and they closed today over $104 a share. It was a great quarter for Apple that really shut down the doomsayers. Yesterday, Tim Cook announced that Apple had shipped its 1 Billionth iPhone – an accomplishment that is simply astounding. How many other products can you think of that have sold a billion? I did a little research and well it isn’t even close. The iPhone is the best selling product of all time!
Congratulations to the Apple team for a great quarter!