Remember just over a year ago, when Apple (NASDAQ: AAPL) was struggling to grow its top and bottom line? Those days are long gone.
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Apple just posted record quarterly revenue and earnings per share for its important fiscal first quarter, which takes place during the holidays. The record results were driven primarily by a double-digit percentage increase in iPhone revenue.
Apple’s new iPhone X, in particular, was a key driver for the quarter. “iPhone X surpassed our expectations and has been our top-selling iPhone every week since it shipped in November,” said Apple CEO Tim Cook in a press release about the quarter.
But strength in Apple’s iPad, services, and other products segments helped, too.
Apple earnings: The raw numbers
|
Metric |
Q1 2018 |
Q1 2017 |
Change |
|---|---|---|---|
|
Revenue |
$88.3 billion |
$78.4 billion |
13% |
|
EPS |
$3.89 |
$3.36 |
16% |
|
Gross profit margin |
38.4% |
38.5% |
(10 basis points) |
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Extending the company’s return to growth since the first quarter of fiscal 2017, Apple’s first-quarter revenue for fiscal 2018 was $88.3 billion, up 13% year over year. The growth rate notably marked an acceleration in revenue growth compared to Apple’s 12% year-over-year revenue growth in Q4.
Earnings per share for the quarter also increased nicely, climbing 16% year over year. However, this earnings-per-share growth was below Apple’s 24% year-over-year growth in the metric during Q4.
Apple’s first-quarter gross profit margin was 38.4% — about even with its gross profit margin of 38.5% in the year-ago quarter.
Going into its first quarter, Apple had guided for revenue of $84 billion to $87 billion. In addition, management expected gross profit margin of 38% to 38.5%. Apple’s revenue easily came in above its guidance range, and its gross profit margin was at the high end of management’s expectations.
Segment results
|
Product Segment |
Q1 2018 Revenue |
Q1 2017 Revenue |
Change |
|---|---|---|---|
|
iPhone |
$61.6 billion |
$54.4 billion |
13% |
|
iPad |
$5.9 billion |
$5.5 billion |
6% |
|
Mac |
$6.9 billion |
$7.2 billion |
(5%) |
|
Services |
$8.5 billion |
$7.2 billion |
18% |
|
Other products |
$5.5 billion |
$4.0 billion |
36% |
Apple’s $61.6 billion in first-quarter iPhone revenue increased a whopping $7.2 billion year over year, representing a 13% rise. Investors can thank Apple’s higher average selling price for this sharp jump in iPhone revenue, since iPhone unit sales actually declined on a year-over-year basis.
Other fast-growing segments during the quarter were services and other products. Revenue in these segments climbed 18% and 36%, respectively.
iPad revenue was up 6% year over year, and Mac revenue was down 5% year over year.
Looking ahead
Looking beyond its first-quarter results, Apple forecast double-digit revenue growth in its second quarter.
Specifically, management said it expected second-quarter revenue between $60 billion and $62 billion. Based on the midpoint of this guidance range, this represents 15% year-over-year growth. Second-quarter revenue at this level would mark yet another quarter of accelerating growth if it’s achieved.
Apple said it expected its second-quarter gross profit margin to be between 38% and 38.5%. This compares to a gross profit margin of 38.9% in the company’s second quarter of fiscal 2017.
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Daniel Sparks owns shares of Apple. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.
