Apple Profits Decline on Flat Revenues
- Paul Thurrott
- Oct 30, 2019
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24
Apple reported its latest quarterly financial results today, and its revenues rose just 2 percent year-over-year to $64 billion. But its profits fell YOY.
“We concluded a groundbreaking fiscal 2019 with our highest Q4 revenue ever, fueled by accelerating growth from Services, Wearables, and iPad,” Apple CEO Tim Cook said in a characteristically hyperbolic statement. “With customers and reviewers raving about the new generation of iPhones, today’s debut of new, noise-canceling AirPods Pro, the hotly-anticipated arrival of Apple TV+ just two days away, and our best lineup of products and services ever, we’re very optimistic about what the holiday quarter has in store.”
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Apple reported net income of $13.7 billion, a decline of 3.1 percent from the year-ago quarter. Its revenues, of $64 billion, were up just 2 percent compared to the year-ago quarter.
Most interestingly, Apple’s iPhone revenues declined, YOY, no doubt due to the lower starting price of its best-selling model, the iPhone 11. Apple reported iPhone revenues of $33.4 billion in the quarter, down 9.2 percent from the $36.8 billion it recorded in the year-ago quarter. But iPhone continues to power Apple’s earnings: The product line contributed 57.5 percent of Apple’s total revenues.
Mac sales were also down YOY, to $6.9 billion, compared to $7.3 billion a year ago.
In the good news department, services sales soared to $12.5 billion, up 15 percent from the $10.6 billion a year ago. Wearable sales were also up, by 35 percent, to $6.5 billion. And iPad sales surged 13 percent to $4.6 billion.
Conversation 24 comments
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Thom77
<p><em>"</em><em style="color: rgb(0, 0, 0);">Most interestingly, Apple’s iPhone revenues declined, YOY, no doubt due to the lower starting price of its best-selling model, the iPhone 11."</em></p><p><br></p><p><span style="color: rgb(0, 0, 0);">There is plenty of doubt when Apple conveniently at Q4 last year announced (after having a flat YOY in Iphone sales that year) that they were no longer going to announce actual sales figures. </span></p><p><br></p><p>Without those actual numbers, I am unclear on how you can claim there is no doubt that a lower price is the cause of declined revenues without showing sales figures that show the mathematical proof … unless theres some other way I am uninformed of.</p>
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Stooks
<p>Funny how each site lays this out. </p><p><br></p><p>Most places that I read this news are glowing since Apple beat almost all if not all expectations. </p><ul><li><strong>Q4 EPS: $3.03, Exp. $2.91</strong></li><li><strong>Q4 Revenue: $64.04BN, Exp. $63.01N</strong></li><li><strong style="color: rgb(61, 61, 61);">iPhones: $33.362BN, which was down bigly from $36.755BN a year ago, but above the $32.25BN expected</strong></li></ul><p><br></p><p>Or their guidance for Q1 revenue between $85.5-$89.5BN, the upper end well above the consensus estimate of 86.2BN.</p><p><br></p><p>I guess it is all about how you feel about Apple?</p>
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Stooks
<blockquote><em><a href="#484963">In reply to GarethB:</a></em></blockquote><p>The flaw in your logic is that because they beat the forecast, which you think means nothing, their stock price went up……which does mean $$$ for share holders. </p>
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dontbeevil
<p>but but apple is the best, glad to see some apple fans finally starts to wake up, better late than ever</p>
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Stooks
<blockquote><em><a href="#485005">In reply to dontbeevil:</a></em></blockquote><p>Your hard core, all the time, Anti-Apple stance is boring. Apple, just like Microsoft and others makes good and bad products. At least they push harder than anyone else on the privacy front.</p><p><br></p><p>I am a big Microsoft fan. I have a Mac, provided by my company for testing purposes, but I professionally and personally use Windows, Office 365 (Home/Enterprise) and Azure. That said I need mobile devices and Apple IMHO makes the best. Best being a combination is quality, 3rd party support and PRIVACY. Microsoft makes some great apps for Apple devices, including the Mac.</p><p><br></p><p>I also have Android testing devices but you will NEVER catch me using them for anything real. Google is an ad company and all of their products are nothing but information collection tools to feed their ad business.</p>
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wocowboy
Premium Member<p>It's amazing after such a negative report and down quarter that Apple stock soared in after-hours trading. Something doesn't add up after reading Paul's spin on these quarterly results.</p>
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Stooks
<blockquote><em><a href="#485073">In reply to oscar1:</a></em></blockquote><p>Microsoft a consumer focused company??? My definition of "focused" from dictionary dot com…"pay particular attention to". </p><p><br></p><p>I am sorry but that is NOT Micrsoft. They are business/Enterprise focused company. They could shut down both Surface and Xbox and it would impact 1% or their revenue? Maybe 2%?</p><p><br></p><p>Apple is a consumer focused company, as in 99+%. They are exact opposite of Microsoft. </p><p><br></p><p><br></p>
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Stooks
<blockquote><em><a href="#485067">In reply to oscar1:</a></em></blockquote><p>Actually they are going into/are in the cloud. The part of Apple that is growing the most are their services. Apple Music, Apple TV+, iCloud and every thing that uses it (apps, photos, etc) App store….etc…etc.</p><p><br></p><p>The very fact that they have Apple Music on Android, and Apple TV+ on NON-Apple devices (Samsung TV's, LG TV's, Roku boxes) shows you that their play is moving to services/cloud. Other things like AirPlay 2 which is software or hardware vs 1.0 which required a Apple chip, lets vendors like Samsung or Sonos to support AirPlay for the BILLIONS of iOS devices out there.</p><p><br></p><p>Apple is not going to go after any kind of Enterprise market, as in servers, AI, SAAS, IAAS etc. Their Enterprise play begins and ends at the use of iOS devices as endpoints for the Enterprise. Honestly I do not think they even care if the Enterprise uses Mac's anymore. They would rather sell 5000 iPads to a large corporation vs maybe 200 Mac's for executives in the same large corporation.</p>