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Highlights from Apple's Q1 2020 Financial Conference Call on Hardware, Services, China, Apple TV+ and much more

Apple Smashed their Quarterly Guidance by Delivering a new All-Time Revenue Record Fueled by Strong Demand for iPhone 11

1. Apple Financials Related  Q


In October 2019 Apple reported their highest ever Q4 revenue.  This afternoon Apple announced financial results for its fiscal 2020 first quarter ended December 28, 2019. The Company posted quarterly revenue of $91.8 billion, an increase of 9 percent from the year-ago quarter and an all-time record, and quarterly earnings per diluted share of $4.99, up 19 percent, also an all-time record. International sales accounted for 61 percent of the quarter’s revenue.


Tim Cook, Apple’s CEO: "We are thrilled to report Apple’s highest quarterly revenue ever, fueled by strong demand for our iPhone 11 and iPhone 11 Pro models, and all-time records for Services and Wearables. During the holiday quarter our active installed base of devices grew in each of our geographic segments and has now reached over 1.5 billion. We see this as a powerful testament to the satisfaction, engagement and loyalty of our customers — and a great driver of our growth across the board."


Luca Maestri, Apple’s CFO: "Our very strong business performance drove an all-time net income record of $22.2 billion and generated operating cash flow of $30.5 billion. We also returned nearly $25 billion to shareholders during the quarter, including $20 billion in share repurchases and $3.5 billion in dividends and equivalents, as we maintain our target of reaching a net cash neutral position over time."


After hours, Apple's stock price at 3:19 PST rose $3.91/share. Apple's stock 'AAPL' had gained $8.74 for the day before the closing bell or 2.38%. That's up a total of 3.61% in the last 2 hours or up $12.65/share.  You can stay on top of this live chart here



Apple’s board of directors has declared a cash dividend of $0.77 per share of the Company’s common stock. The dividend is payable on February 13, 2020 to shareholders of record as of the close of business on February 10, 2020.


Apple Guidance for its Fiscal 2020 Second Quarter


  • revenue between $63.0 billion and $67.0 billion
  • gross margin between 38.0 percent and 39.0 percent
  • operating expenses between $9.6 billion and $9.7 billion
  • other income/(expense) of $250 million
  • tax rate of approximately 16.5 percent


Apple Q1 FY20 Consolidated Financial Statements  by Jack Purcher on Scribd


After the release of their financial statement to the press, Chief Executive Tim Cook told Reuters the company was using a wider-than-normal prediction range because of the uncertainty created by the coronavirus outbreak in China. Cook said Apple has shut one store in China and reduced hours at others and is restricting employee travel due to the virus.


Cook added that "We have limited travel to business-critical situations as of last week. The situation is emerging and we’re still gathering lots of data points and monitoring it very closely."


Further, Cook stated that while they have suppliers in the Wuhan area, the heart of the outbreak, they have alternatives.


On other fronts, Cook said the company’s Apple TV+ subscription streaming video service released last fall was a 'rousing success' and that it is 'very strong, both the people that are getting it in the bundle and the people that are paying for it that haven’t bought a new device.'


Solid iPhone sales of $55.96 billion compared with analyst estimates of $51.6 billion and year-before sales of $52 billion snapped a year long trend of major sales declines for Apple’s biggest-selling hardware product.


Cook said that the iPhone 11 and iPhone 11 Pro models drove the growth and also factored into the company’s forecast, calling the devices "the strongest iPhone lineup we’ve ever had."


On Apple’s wearables segment, which includes Apple Watch and AirPods, hit $10.0 billion in revenue versus estimates of $9.5 billion, up sharply from $7.3 billion the year before.


Bernstein analyst Toni Sacconaghi wrote in a note to clients that sales of AirPods alone – a metric Apple does not disclose – may have reached $3.5 billion to $4 billion in the December quarter, a rise of 150% from the year before.


Lastly, Cook told Reuters that Apple could not make enough AirPods and Apple Watch Series 3 devices to meet demand during the fiscal first quarter and continues to be short on both. Cook said Apple does not have an estimate for when it will be able to fulfill demand for each. "We’re working on both of those very hard." 


10.0X Quarterly Financial News


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