Apple rises on earnings, revenue beat despite iPhone, China concerns

Apple Reports Earnings Tomorrow. Here’s What to Expect

Apple Reports Earnings Tomorrow. Here’s What to Expect

People use their phones outside an Apple store in Beijing, China January 7, 2019.

Apple is no longer disclosing how many iPhones it shipped after the quarter is completed, a change that Cook announced in November.

Apple's board of directors has declared a cash dividend of $0.73 per share of the Company's common stock. Mr. Cook wrote that the slowdown of China's once-rapidly growing economy and its trade tensions with the United States "accounts for all of our revenue shortfall to our guidance and for much more than our entire year-over-year revenue decline". Despite lower than expected sales of the iPhone XS, XS Max and XR, Cook hailed those 2018 phones as "by far the best iPhones we've ever shipped". I'm encouraged by the comments coming out of both countries. As a point of reference, Apple during the same quarter previous year posted revenue of $88.3 billion and EPS of $3.89. Services gross margin hit 63 per cent. It said it now has 1.4 billion active devices, an increase of 100 million from previous year, and that 900 million of those are iPhones. This helps emphasize that the iPhone base is still growing at a substantial rate, and helps it show investors how many customers are subscribing to services (there are more than 360 million paid customers across services, if you're wondering). The street was looking for $5.9 billion, and Apple reported $6.729 billion. Apple keeps up to 30 percent of the payments it handles. And revenue from services - an increasing area of focus for Apple - topped $10.8 billion during the holiday quarter, a 19 percent gain from past year.

Even though Apple isn't giving sales numbers for the iPhone, iPad and Mac anymore, it did provide total revenue. Cook noted in a conference call Tuesday that "the relative strength of the USA dollar has made our products more expensive in many parts of the world".

"When you look at foreign currencies and then particularly those markets that weakened over the previous year those (iPhone price) increases were obviously more", Cook told Reuters. However, sales were down year-over-year in every worldwide segment.

Apple also said it is expecting lower revenues next quarter - between $55 billion and $59 billion - compared to the same time a year ago, when it reported revenues of $61.1 billion.

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For the quarter ending in December, Apple's busiest due to the holiday shopping season, Apple reported revenue of $84.3 billion, slightly above analysts' average estimate of $84 billion.

Revenues from iPad sales, however, handily beat estimates.

Apple also reported better-than-expected earnings from the key holiday quarter.

The street expects the number of iPhones sold over the next three months through the end of March will continue to decline at the steepest level in the company's history.

Apple Inc. on Tuesday said sales for its fiscal second quarter would most likely be lower than Wall Street expected, a signal that it continues to face weak demand for its iPhone, especially in China, the world's biggest smartphone market.

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