Apple continued to defy the problems gripping the rest of the
smartphone market, posting a 33% increase in quarterly profit on
the back of surging iPhone sales and explosive growth in China.
We're live blogging the earnings and call with analysts at
http://blogs.wsj.com/digits/
5:11 pm
Moving on to products: New MacBook. "Very happy with response
from customers."
5:10 pm
More on energy farms and renewable energy for the data centers.
"Apple is deeply committed to these initiatives," he says.
5:10 pm
Apple is responsible for creating more than 670,000 jobs across
Europe, he says. He is touting the data centers being created, and
the environmental footprint, but also that a lot of the jobs are
through the app store.
5:08 pm
(And ResearchKit, the science data-gathering app family.)
5:07 pm
Cook is high-fiving on lining up retailers for Apple Pay. Best
Buy is in, but also a health-care payment network, he says. And he
is going through health apps that are being developed through
HealthKit.
5:06 pm
Talking about the $200 in total capital return. More to come.
Cook also mentions that the Discover is now on board with Apple
Pay. That's the last of the big card companies.
5:05 pm
We've made 27 acquisitions in the last 6 quarters.
5:05 pm
One of Cook's favorites: We are growing the Mac while the PC
industry contracts.
5:04 pm
App store had its best quarter ever. Services revenue of near $5
billion is a record.
5:04 pm
Cook: strongest March quarter ever. Higher rate of people
switching to the iPhone than in previous cycles.
5:03 pm
Safe harbor statements now, and Tim Cook and Luca Maestri can be
heard clearing their throats, getting ready.
5:03 pm
The call is under way. Thanks to everyone for hanging around
through the technical difficulties. Hope that doesn't happen
again.
5:02 pm
Interesting wrinkle in the data chart. All of Apple's geographic
revenue segments were down from that ridiculous first quarter. ...
Except China. That region, which includes HK and Taiwan, was
actually up 4%.
4:58 pm
Apple just posted its data sheet for the quarter. You can see it
here. Services revenue was nearly $5 billion. The "other products"
group had revenue of $1.69 billion, down 10% from a year earlier.
I'll be honest, I don't know if any Apple Watch preorder numbers
are included in there. But it does speak to the end of the
iPod.
4:53 pm
Here is the first cut at the earnings story from Daisuke
Wakabayashi.
4:50 pm
We've got a few minutes before the call.
4:50 pm
Revenue from Greater China was up 71% to $16.82 billion. That
compares with $21.3 billion in the Americas region, which was up
19%. Revenue in Japan fell 15% to $3.46 billion.
4:48 pm
Apple is boosting its dividend by 11% and its share-repurchase
program to $140 billion. In all, Apple pledged to return $200
billion to shareholders through buybacks and dividends by March
2017. It had previously promised to return $130 billion by the end
of 2015.
4:46 pm
I'll just chalk that hiccup up to overwhelming popularity and
demand for a live blog from yours truly. Cause the alternatives
just get me all enraged.
4:43 pm
Readers, my apologies. We had some technical difficulties and it
looks like a whole swath of my posts never showed up.
EPS: $2.33 .. this is above Wall Street forecasts.
Revenue is $58 billion, also above what Wall Street expected.
Apple sees revenue in Q3 of between $46 billion and $48
billion.
Net income was $13.6 billion.
The gross margin figure was 40.8%, above Apple's own
guidance.
Sales numbers:
iPad was 12.6 million
iPhone was 61.2 million
Mac was 4.6 million
4:35 pm
Apple does so much business overseas, I wonder what the bite
from the stronger dollar was. It's been a sharp blow to other
companies.
4:32 pm
iPad sales: 12.6 million
4:32 pm
Gross profit margin: 40.8%
4:31 pm
Revenue: $58.01 billion
4:30 pm
Numbers are out:
4:30 pm
I mentioned earlier that Apple doesn't give out guidance on its
profit, but it does talk about margins. Three months ago,
itestimated its profit margin would come in between 38.5% and
39.5%.
4:26 pm
Still waiting. Had I know, I would have made a coffee run. As my
kid says, dangit.
4:22 pm
Still waiting on the numbers. Checking in on the stock, it
finished up 1.8% at $132.65. After hours, the stock is up about a
half-percent.
4:20 pm
I was a big fan of this tweet earlier. Really sums up the past
few years.
Eight years, 9 products, $600 billion of new market value.
Apple's incredible journey in one simple chart. $AAPL
pic.twitter.com/ZFDfTSg4ei
--- Dennis K. Berman (@dkberman) April 27, 2015
4:17 pm
There is a super handy sheet on Apple's site you can look at,
too. Here is the table for Q1 results. And here is the one from a
year earlier, where we'd compare results.
4:11 pm
I still think it's a crazy coup that Apple gets free advertising
from big banks regarding Apple Pay.
4:10 pm
I also expect Apple to talk about how successful Apple Pay is.
There are a bunch of banks and retailers signed up, and Apple can
stay with this for the long hall. I don't know how you measure
financial success easily, and any money made it folded into the
services line on the balance sheet, along with iTunes and the App
Stores.
4:05 pm
I'd like to level set some expectations here: I don't type as
fast as a newswires! So when the numbers come out, I'll get them to
you. Just not like a robot.
4:04 pm
Thanks for the questions, readers. The call is at 5 p.m. ET, and
you can listen here. Mind the instructions about what device or
browser to use. The earnings can come any time after 4 p.m. ET.
4:02 pm
Good readers, you are always invited to share your thoughts in
the comments area. I'm not terribly interested in the Apple v.
Samsung flame wars. Outside of that tired commentary, let us know
what you are thinking. Specifically, if you were able to ask a
question on the conference call, what would it be?
4:00 pm
(Reminder that analyst forecasts on per-share profit are usually
compared with the adjusted figure, not the net income bottom
line.)
3:59 pm
With a few minutes to go before the closing bell on Wall Street,
Apple's stock is up 1.6%. Analysts surveyed by Thomson Reuters
expect earnings of $2.16 a share, compared with a split-adjusted
$1.66 a year earlier. (Apple had a 7-for-1 stock split in
June.)
Revenue is expected to be $56.08 billion, compared with $45.6
billion reported a year earlier. If Apple hits that forecast, it
would have to pass the top end of its own guidance last quarter, at
$55 billion.
3:56 pm
And, of course, we're looking for some sense of how sales of
Apple Watch went during the preorder period, and perhaps the launch
weekend. I'm not hopeful for specific numbers, but I wouldn't be
surprised if CEO Tim Cook doesn't say the activity has blown past
the company's expectations.
Remember, the Apple earnings sheet doesn't include the Watch on
its own line, like the phone, tablet and computer. That goes in the
"Other Products" category, which also includes Beats, Apple TV and
now the iPod. But we know Apple didn't make enough of the Watches
for the launch. Let's see what else the company has to say.
3:51 pm
Another area to keep an eye on is Apple's cash position. It was
at a staggering $178 billion three months ago. We're watching to
see if Apple ups its program to return money to shareholders. It
has less than $30 billion to go by the end of the year to fulfill
the current plan.
3:49 pm
Outside of the smartphone sales, there are a couple of other
things to watch in the earnings report and during the call. One is
sales in the Greater China region, which includes Taiwan and Hong
Kong.
China is an increasingly important market for Apple, and deals
struck there have helped the company push ever-more products. For
Q1, the company reported sales of $16.14 billion. A year ago,
revenue from the region was $9.29 billion.
3:46 pm
It's important to keep those numbers in mind. Apple Watch and
Apple Pay ate up the majority of news headlines in recent months.
The MacBook gets a lot of attention, and even Mac computer sales
have been shining. The iPad continues its downward trend, suffering
from twin challenges of a slower upgrade cycle and bigger-screen
phones eating into demand for tablets. Despite all of that, the
iPhone is the story.
3:43 pm
What will Apple do for an encore? Don't expect sales to match
that heady number from Q1. Still, Apple is expected to show robust
growth in phones from a year earlier.
Analysts polled by Fortune Magazine think Apple sold 56.8
million iPhones, 30% more than the same period a year ago. That's
still pretty impressive. Analysts at FactSet are expending a
similar number of around 55 million, according to CNN Money.
3:37 pm
Yes, it's second-quarter earnings even though the calendar year
is typically the end of the first quarter. Apple's first quarter
includes the holiday season. Three months ago, the company had a
bonkers quarter.
To put it more professionally, it was the most profitable
quarter of any publicly traded company ever. It was all thanks to
sales of the iPhone, with hit 74.5 million thanks to Apple's new
pair of bigger-screened phones.
3:34 pm | Welcome! | by Brian Fitzgerald
Hello everyone. Thanks for stopping by our live blog for Apple's
second-quarter earnings and the company's call with Wall Street's
financial analysts.
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