Apple announced slightly better-than-expected holiday-quarter earnings on Tuesday afternoon. The company’s stock is up 3% in after-hours trading in the wake of the report. Here are the top lines:
- Revenue. Apple reported quarterly revenue of $84.3 billion, a decline of 5% from the year-ago quarter, but slightly better than the $84 billion analysts had expected. Revenue from the iPhone declined 15% from the year-ago quarter, but total revenue from all other products and services grew 19%. The company on January 2 had warned of an underwhelming holiday quarter for iPhone sales, revising down its expected revenues from $89 billion to $84 billion.
- Tim Cook. “While it was disappointing to miss our revenue guidance, we manage Apple for the long term, and this quarter’s results demonstrate that the underlying strength of our business runs deep and wide,” the Apple CEO said in a statement. “Our active installed base of devices reached an all-time high of 1.4 billion in the first quarter, growing in each of our geographic segments.”
- iPhone business. As for iPhone-specific revenue, the company reported roughly $52 billion for the quarter, down from roughly $61 billion in the year-ago quarter. Wall Street expected $53 billion on sales of 68 million devices. (Apple has stopped reporting the number of devices sold.). The iPhone provides roughly two-thirds of Apple’s revenue. Apple CEO Tim Cook placed much of the blame for the iPhone sales shortfall on the China market. A number of factors, including phone pricing, strong local phone competition, and the brewing U.S.-China trade war may have played a role.
- Services revenue. Apple reported $10.9 billion. Factset analysts had expected $10.8 billion. The company reported a profit margin of 62.8% for services. With iPhone sales slowing, analysts will be especially interested to see what Apple has to say about the performance of its services business (the app store, Apple Music, iCloud, etc.), which is expected to pick up the slack, revenue-wise. Apple has said it wants to reach $48.6 billon in services revenue per year by 2020.
- March quarter guidance: Apple says it’ll report revenue between $55 billion and $59 billion in the March-ending quarter.