Apple reported its second quarter 2018 financial results today, posting quarterly revenue of $61.1 billion on sales of 52.2 million iPhones, 9.113 million iPads, 4.078 million Macs, and $9.190 billion in services. The company had offered a revenue guidance range between $60 billion and $62 billion.
Despite concerns expressed ahead of the report by analysts, both revenue and earnings per share (EPS) represented records for Apple. Sales were modestly up year over year — versus Q2 2017’s 50.76 million iPhones, 8.92 million iPads, and 4.199 million Macs, which generated $52.9 billion in quarterly revenue — with a 16 percent improvement for Q2 2018. EPS was up 30 percent, generating over $15 billion in operating cash flow.
“We’re thrilled to report our best March quarter ever, with strong revenue growth in iPhone, Services, and Wearables,” said Tim Cook, Apple’s CEO. “Customers chose iPhone X more than any other iPhone each week in the March quarter, just as they did following its launch in the December quarter. We also grew revenue in all of our geographic segments, with over 20 percent growth in Greater China and Japan.”
The quarter’s biggest growth came from services and “other products,” which saw increases of 31 and 38 percent respectively, likely due to strengthening sales of Apple Music, Apple Pay, and Apple Watch. Helped by high iPhone X prices, the iPhone saw a 14 percent revenue gain year over year, despite only growing 3 percent in unit sales. Once again, the Mac fell in sales for the quarter, this time 3 percent year over year in units, though it held steady in revenue.
Apple’s strongest revenue growth came from Japan with a 22 percent year-over-year increase, next to China, which had a 21 percent increase. Even the Americas showed strong improvement with a 17 percent increase, while Europe (9 percent) and the rest of the Asia/Pacific region (4 percent) were lower but still on the upswing.
“Our business performed extremely well during the March quarter, as we grew earnings per share by 30 percent and generated over $15 billion in operating cash flow,” said Luca Maestri, Apple’s CFO. “With the greater flexibility we now have from access to our global cash, we can more efficiently invest in our U.S. operations and work toward a more optimal capital structure. Given our confidence in Apple’s future, we are very happy to announce that our Board has approved a new $100 billion share repurchase authorization and a 16 percent increase in our quarterly dividend.”
Apple’s board of directors declared a cash dividend of $0.73 per share of common stock, payable May 17 to shareholders of record as of the close of business May 14.
For Q3 2018, Apple is offering a revenue guidance range between $51.5 billion and $53.5 billion, with gross margin between 38 percent and 38.5 percent. That compares with Q3 2017’s projected range of $43.5 billion to $45.5 billion target range, which it met with an actual revenue of $45.4 billion.
Apple will further detail the results in an earnings call with analysts and media, which we will cover live.
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