Apple earnings stall out for Q1
Details
Michelle Clancy
| 30 January 2019

CE giant Apple has reported first-quarter revenue of $84.3 billion with $4.22 in basic earnings per share – a decline of 5% from the $88.3 billion posted a year ago thanks to flagging iPhone sales.

This meets Wall Street’s expectations of $84 billion with an EPS of $4.17 – but those expectations were in place thanks to Apple revising its guidance ahead of reporting. Apple CEO Tim Cook issued a letter in January to investors, cutting Q1 guidance from a range of between $89 billion and $93 billion to $84 billion.

Apple meanwhile set even lower guidance for Q2 revenue, between $55 billion and $59 billion.

“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,” Cook said in a statement.

Most of the company’s issues are due to flagging sales in China; revenue there shrank nearly 27% to $13.2 billion compared to $18 billion in the quarter one year ago. This contributed to iPhone revenues falling 15% year-over-year with $52 billion in revenue in Q1, compared to $61.1 billion in Q1 2018.

Other product divisions fared better: Services were up 19%, Macs up 9%, iPad up 17%, and the Wearables, Home and Accessories division was up 33%. Services also saw gross margins of 62.8%.

Apple said that it had 1.4 billion devices worldwide at the end of December 2018, up from 1.3 billion at the end of January 2018.

“Our global active install base of iPhone continues to grow and has reached an all-time-high at the end of December,” Apple CFO Luca Maestri said on the earnings call. “We are disclosing that number now for the first time, it has surpassed 900 million devices.”