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Apple to Announce Earnings Today Following First Revenue Warning in 16 Years, End of Unit Sales Reporting

Apple is set to report its earnings results for the first quarter of its 2019 fiscal year at 1:30 p.m. Pacific Time today.

The quarter began September 30, 2018 and ran through December 29, 2018, according to Apple's fiscal year accounting calendar.

Apple issued a rare earnings warning for the quarter on January 2, its first in over 16 years. The revised guidance is as follows:
  • revenue of approximately $84 billion
  • gross margin of approximately 38 percent
  • op. ex. of approximately $8.7 billion
  • other income/expense of approximately $550 million
  • tax rate of approximately 16.5 percent before discrete items
Apple's initial guidance for the quarter on November 1:
  • revenue between $89 billion and $93 billion
  • gross margin between 38 percent and 38.5 percent
  • op. ex. between $8.7 billion and $8.8 billion
  • other income/expense of $300 million
  • tax rate of approximately 16.5 percent before discrete items
Apple's guidance suggests it will report its second-best first quarter results ever, based on revenue, behind its 2018 record of $88.3 billion:
  • 2015: $74.6 billion
  • 2016: $75.9 billion
  • 2017: $78.4 billion
  • 2018: $88.3 billion
  • 2019: $84 billion

What to Look For

  • Apple's revised guidance suggests it will report its first holiday quarter sales decline since 2001, although it would still be the company's second-best quarter ever in terms of revenue.
  • This is Apple's first earnings report in which it will not disclose iPhone, iPad, or Mac unit sales, a change it announced back on November 1. Apple's financial chief Luca Maestri said Apple may provide qualitative commentary about sales if necessary, so it will be interesting to see how the conference call and question-and-answer session play out.
  • In a letter to shareholders on January 2, Apple CEO Tim Cook disclosed that Apple's revenue will be lower than its original guidance for the quarter, coming in at approximately $84 billion. Apple initially guided for revenue of $89 billion to $93 billion in the quarter on November 1. Look for any potential commentary surrounding the shortfall.
  • Apple's guidance for its second quarter of fiscal 2019, which began December 30 and so far only encompasses the launch of new Smart Battery Cases for the iPhone XS, iPhone XS Max, and iPhone XR. It could eventually include new iPads, a new iPod touch, new AirPods, the AirPower, more. Analysts expect revenue of around $58.9 billion in the second quarter, compared to $61.1 billion in the year-ago quarter.
  • Continued growth of Apple's Services category, including the App Store, Apple Music, iCloud, iTunes, Apple Pay, and AppleCare. Last quarter, Apple's services brought in a record $9.9 billion revenue. Apple has said it is still on target to double its fiscal 2016 services revenue by fiscal 2020. Analysts expect services revenue of around $11 billion in the quarter.
  • Continued growth of Apple's Wearable, Home, and Accessories category, previously named Other Products, including the Apple Watch, Apple TV, HomePod, AirPods, Beats, iPod touch, and accessories—particularly as Apple diversifies revenue beyond the iPhone.
Apple's CEO Tim Cook and CFO Luca Maestri will discuss the company's earnings results on a conference call at 2:00 p.m. Pacific Time today. MacRumors will loosely transcribe the one-hour call as it occurs live.

Tag: AAPL


Top Rated Comments

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11 weeks ago
BEFORE everyone freaks out, we are getting more detail on services margin and they will post record EPS.

Doom and gloomers need to calm down. Too summarize:

China was over 100% the revenue shortfall and revenue records were still set in the US, Canada, Mexico, Spain, Italy, Germany, Korea, Vietnam, and the Netherlands.

No, prices aren't too high in all markets and for ones like China, they have priced iPhones more aggressively.

Other companies have reported significant weakness in China too, including:

* Apple
* Nvidia (revised rev down 20%)
* Caterpillar
* Samsung
* Intel
* FedEx
* Goodyear
* Tiffany

Apple is going to make $20B in profit in 90 days in Q1 2019.

The stock trades at 10X earnings, so Mr. Market will value earnings over time.

Stocks go up and down.

Have a nice day.
Rating: 23 Votes
11 weeks ago
One (out of many) reasons why I miss Steve Jobs is because he cared more about customers than shareholders. Tim Cook cares more about shareholders than customers. That’s why Cook raised prices by hundreds of dollars on many of Apple’s products. That’s also why Cook let many of Apple’s less profitable products (such as the Mac Pro, Mac Mini, iPod Touch, etc.) go without updates for many years, while also killing off less profitable product lines like the Cinema Display line and the Airport line. For Cook, it’s profits over people.
Rating: 19 Votes
11 weeks ago

When will all of you 4 inchers realise you are in the minority.


I thought 4 inches was the average? :(
Rating: 11 Votes
11 weeks ago

...


You tend to state your opinions as if they are facts. Unless you work at Apple in an executive position you offer nothing more than mere speculation the same as the rest of us. You talk to people like they are little children which also doesn't help.
Rating: 11 Votes
11 weeks ago
Make a 4" phone you cowards.
Rating: 8 Votes
11 weeks ago
It will start with Cook saying he’s ‘thrilled’ and ending with he has great confidence in Apple and it’s products in the pipeline. Followed with vague answers from questions, blaming the bad economics in China (which predict to grow at a rate of an astonishing 6% throughout 2020). Defending the high prices in the UK for the brexit (which still hasn’t occurred).

Amazing :rolleyes:
Rating: 6 Votes
11 weeks ago

Make a 4" phone you cowards.


When will all of you 4 inchers realize you are in the minority?
Rating: 5 Votes
11 weeks ago
For those who didn't understand Tim Cook's comment about "more than 100% of the revenue shortfall was due to China" ...

Apple guided $89 to $93B in revenues for Q1 back in November. Earlier this month, they revised the guidance to $84B.

Cook said that more than 100% of the shortfall was due to lower revenues in China.

Using $89B as the baseline and $84B as the new guidance, the shortfall in revenue is $5B. So what happened is that back in November, Apple figured that China revenue would be $X. In January as real numbers were coming in (but not finalized), the projected revenue for China would be $X - $5B (actually a little more than $5B).

Using numbers. Lets say that Apple expected $9B in China revenues and the actual revenues were $3.8B. That's a shortfall of $5.2B. Therefore, China represents 104% of the revenue shortfall.

EDIT - [USER=700321]@Carnegie[/USER] was kind enough to point out my misinterpretation of Tim Cook's statement. The "more than 100%" comment was in reference to iPhone revenues in China from Q1-2018 to Q1-2019.
Rating: 5 Votes
11 weeks ago
The market always "rewards" Apple with after-hours drop within minutes of releasing their earnings. It will not be any different today at 1:30 PM PST.
Rating: 4 Votes
11 weeks ago

China was over 100% the revenue shortfall and revenue records were still set in the US, …


So, for e.g., if Apple made $400 million in China last year, it made zero dollars this quarter in China?:rolleyes:

Apple is going to make $20B in profit in 90 days in Q1 2019.


I hope it does - good for the stock holders.:)

Stocks go up and down.


Oh! They do?!o_O
Rating: 3 Votes

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