Even when Apple has reported earnings during the best of times over the past few years, there’s always been at least a blemish or two somewhere. Not this time.
The Q4 2017 earnings report Apple dropped today is about as close to perfection as a publicly traded company can ever get. That it came from the world’s most valuable company is, well, just plain bonkers.
Near the end of an earnings call today, Apple CEO Tim Cook summed things up perfectly when he responded to an analyst’s question about what had gone so right to cause the the company to exceed revenue expectations by so much.
Cook started rattling off Apple’s different products, and then he said: “We just had a phenomenal quarter. We’re literally firing on all cylinders. That, and our new products give us great confidence heading into the holiday season.”
It’s not just Cook. Analyst Patrick Moorhead of Moor Insights & Strategy was effusive:
“Apple crushed it in Q4 and provided signals they could meet most of the demand next quarter for iPhone X,” he said in a statement. “The biggest standouts for me were that every single product and service line was up, including iPads, which had been challenged.”
Every single product. Up.
In recent years, the iPad has suffered a pretty stunning fall from grace. But it just posted its second quarter of growth, with unit sales up 11 percent year-over-year.
Mac sales: Up 25 percent YOY.
Services revenue: Up 34 percent YOY.
Other products (Apple TV, Apple Watch, Beats products, iPod touch): Up 36 percent YOY.
Apple Watch: Unit shipments grew 50 percent for the third straight quarter.
China revenue: Up 12 percent YOY after slumping for almost two years.
Guidance: The company projected between $84 billion and $87 billion, which will likely put it above the $84.5 billion analysts were projecting. That would be by far a new record for Apple.
What made this performance so surprising, and a little mind-blowing perhaps for analysts on the earnings call, was that for once the big growth was not driven by the iPhone. This product has represented a growing percentage of Apple’s revenues in recent years, despite new product launches. But in this quarter, YOY, unit sales were only up 3 percent, and revenue was up only 2 percent.
Cook claimed the iPhone 8 and 8 Plus were the best-selling new iPhones at launch ever. Maybe, but that wasn’t the source of Apple’s blowout earnings. Everything else was.
Really, the only remaining question is just how huge things could be, likely a function of how quickly Apple can ramp up production of the iPhone X. Cook acknowledged the unprecedented nature of the new iPhone launch this year. And he said there is some haziness about just how far the company will need to go to meet the iPhone X demand.
“The truth is, we don’t know,” Cook said. “We’ve put our best estimates into the guidance. And you can see we’re very bullish.”