Apple Announces Secd Quarter Results for 2018: $ 13.8 Billi Profit $ 61.1 Billi, $ 52.2 Milli iPhone

Apple announced today its financial results for the secd fiscal quarter of 2018, which correspds to the first calendar quarter of the year.

For the quarter, Apple recorded a business turnover of $ 61.1 billi and a quarterly net profit of $ 13.8 billi, or $ 2.73 per diluted share, compared with 52.9 billis of dollars and a net profit of $ 11.0 billi -ago quarter. The turnover, earnings and earnings per share were recorded for any secd fiscal quarter of the company's history.

The gross margin for the quarter was 38.3%, compared to 38.9% a year ago, with internatial sales accounting for 65% of sales. Apple also reported a quarterly dividend increase of $ 0.73 per share, up from $ 0.63. The dividend is payable May 17 to shareholders of record May 14.

In additi to the dividend increase, Apple announces a new 100 billi redempti authority and the company hopes to complete its $ 210 billi redempti authority by the end of the quarter In progress.

For the quarter, Apple sold 52.2 milli iPhones, compared with 50.8 milli a year ago. IPad sales increased slightly to 9.1 milli, up from 8.9 milli a year ago, while Mac sales fell 4.1 milli to 4.1 milli.

"We are excited to announce the best quarter of the year., Services and Wearables," said Tim Cook, Apple's CEO. "Customers chose iPhone X more than any other iPhone every week in the March quarter, just as they did after its launch in the December quarter. We also increased our revenues across all geographic segments, with growth of more than 20% in China and Japan.

Apple's forecast for the third quarter of fiscal 2018 includes projected revenue of $ 51.5-53.5 billi and a gross margin between 38 and 38.5 percent.

Apple will broadcast live its secd quarter 2018 financial results cference call at 2:00 pm, and MacRumors will update this story with coverage of the highlights of the cference call.

The Apple cference call is over. A rough transcripti is in advance …

1:39 pm : Apple's shares are up about 4% after trading hours following the release of the results.

1:43 pm : The average sale price of an iPhone was $ 728 during the quarter, down from $ 796 in the previous quarter and $ 655 at the same quarter last year. Still according to Apple CEO Tim Cook, "customers chose the iPhone X more than any other iPhone every week in the March quarter, just as they did after its launch in the quarter of December ".

1:48 pm : The category of Apple services generated a business turnover of $ 9.19 billi in the secd quarter. This is an impressive increase of 31% compared to $ 7.04 billi in the same quarter of the previous year.

1:55 pm : The "Other Products" category of Apple generated a business turnover of $ 3.95 billi in the secd quarter. Like services, this growth is just as impressive at 38% compared to $ 2.87 billi in the same quarter last year.

1:55 pm : The Apple cference call with CEO Tim Cook and CFO Luca Maestri starts in about five minutes.

13:58 : Apple has posted revenue growth from e year to the next in the five major geographic segments it reports, including the Americas (+17 %), Europe (+ 9%), Greater China (+ 21%), Japan (+ 22%) and the rest of the Asia-Pacific regi (+ 4%).

13:59 : Mac's revenue remained stable at $ 5.8 billi.

2:00 pm : Overall, the results are csistent or better than Apple's forecasts and Wall Street expectatis. Apple has just recorded its best quarter of March.

2:01 pm : Get ready for the opening remarks of Apple's cference call …

2:04 pm : Tim Cook: We are proud to announce the results of a very successful quarter today, setting new records for the quarter and the next year. income. $ 61.1 billi in revenue. Sixth csecutive quarter of accelerati of revenue growth. Broad-based growth. IPhe revenues increased by 14%, service revenues by 31%. Grew in each of our geographic segments.

2:06 pm : Tim Cook: Record revenue for all services, including the App Store, iCloud, Apple Pay, Apple Music, and more. Paid subscriptis surpassed $ 270 milli, up over $ 100 milli from last year and over $ 30 milli from the previous quarter.

2:07 pm : Tim Cook: Apple Pay arrives in Norway, Poland and Ukraine in the coming mths.

2:08 pm : Tim Cook: Our ready-to-wear business is now about the size of a "Fortune 300" business. The Wearables business figure has increased by almost 50%, including AirPods, Beats and Apple Watch.

2:09 pm : Tim Cook: We are looking forward to introducing HomePod to more markets around the world and adding new features so. Revolutiary speaker. Widely regarded as the best speaker of its category.

2:12 pm : Tim Cook: The AirPods are a "hit runaway".

2:14 pm : Tim Cook: We are now at half of our fiscal year 2018 with nearly $ 150 billi in revenue … we are very optimistic for the future d & # 39; Apple. We have the best pipeline of products and services we have ever had. The greatest customer satisfacti and loyalty in the industry. Balance sheet and cash flow generati are strg, which allows us to invest significantly in our product roadmap, and to return a significant amount of capital to our shareholders. Recent tax reform allows us to deploy our global treasury more efficiently. In the United States, we expect our direct investment in the ecomy to exceed $ 350 billi over the next five years, with 20,000 new jobs during this period. We look forward to sharing more information about our new campus later this year.

2:16 pm : Tim Cook takes stock of Apple's capital return program: Today, given our strg cfidence in the future from Apple, we are announcing an important update. The board of directors approved an additial share buyback authorizati of $ 100 billi.

2:16 pm : Apple's chief financial officer, Luca Maestri, took over.

2:17 pm : Luca Maestri reviews the high-level financial results of Apple listed above.

2:17 pm : Luca Maestri: The inventory of iPhone channels has been reduced by 1.8 milli units this quarter. 600,000 more units were reduced compared to the previous year.

2:18 pm : Luca Maestri: all iPhone models, 95 customer satisfacti rate, according to research firm 451 Research. 99% amg the iPhone 8, the iPhone 8 Plus and the iPhone X.

2:19 pm : Luca Maestri: The App Store set a new record revenue record in the March quarter. The paid subscriptis of Apple Music have exceeded 40 milli.

2:19 pm : Luca Maestri: More than 90% of the growth in the "Other products" category comes from wearables, including AirPods, Beats and Apple Watch.

2:20 pm : Luca Maestri: The iPad grew both in units and in revenue for the fourth csecutive quarter. 9.1 milli iPad sold in the March quarter. According to IDC's latest estimates, we have gained a share of the global tablet market, and the active installed base of iPads has reached a record high.

2:21 pm : Luca Maestri: 451 Research measured customer satisfacti rates from the iPad to 95%. Of the professial customers who plan to buy tablets in the June quarter, 73% plan to buy iPads.

2:21 pm : Luca Maestri reviews Apple's recent business partnerships.

2:23 pm : Luca Maestri: Great performance of our retail and line stores, which produced their highest turnover in the mth of March. Our stores have hosted more than 250,000 of our popular "Today at Apple" sessis, with a special focus coding and applicati design. During the quarter, we opened beautiful boutiques in Austria and South Korea, our first in each country. 502 Apple Stores around the world today.

2:24 pm : Luca Maestri: Apple has a net cash positi of $ 145 billi. Returned nearly $ 27 billi to investors during the quarter.

2:24 pm : Luca Maestri: The greatest priorities for our mey have not changed over the years. Maintain the liquidity we need for our day-to-day operatis, invest in our future and be flexible to invest in the strategic opportunities facing us.

2:26 pm : Luca Maestri: We increase our dividend to 73 cents per share, an increase of 16%, effective with our next dividend, payable May 17, 2018 to shareholders of record as of May 14, 2018.

2:26 pm : Luca Maestri: We are amg the biggest dividend payers in the world. We ctinue to plan annual dividend increases in the future.

2:27 pm : Luca Maestri: We expect revenues of $ 51.5 to $ 53.5 billi in the June quarter. Tax rate at around 14.5 percent.

2:27 pm : The cference call is now open to questis from analysts.

2:28 pm : Shann Cross of Cross Research questis about the sustainability of the current pricing strategy of the iPhone, including the iPhone X from $ 999.

2:30 pm : Tim Cook: iPhone revenues increased by 14% during the March quarter … We will ctinue to provide different iPhones to meet their Needs … Customers chose the iPhone X more than any other iPhone every week in the March quarter, just as they did following its launch in the December quarter … Since we divided the line with the launch of the iPhone 6 and iPhone 6 Plus in 2014, undergraduate model of the iPhone's line also was the most popular. With 99 percent customer satisfacti, the iPhone X is a well-liked product. I think it's e of those things as if a team wins the Super Bowl, maybe you want them to earn a few more points, but that's a Super Bowl winner . That's how we feel about it. I could not be more proud of the product.

2:31 pm : Morgan Stanley's Katy Huberty: In my opini, growth in service revenues is the main driver of the quarter. What ctributed to this?

2:34 pm : Tim Cook: The good news is that it's not a single geographic segment or a single service. We put records from the App Store to Apple Music at iCloud to Apple Pay and more. Below that, if you look at the subscripti numbers, paid subscriptis have grown from over 100 milli an annual basis to more than 270 milli by the end of the quarter. In terms of the lg term, we are in line with our goal of doubling the turnover of our services in 2016.

2:35 pm : Tim Cook the trade war and tariffs between the United States and China: "I firmly believe that both countries can win and grow together."

2:36 pm : Questi: "What is working for China right now? IPhe X specifically or something else?"

2:38 pm : Tim Cook: iPhone X was the most popular smartphe in all of China in the last quarter. The iPhone X has worked well there. To reach our goal of 21% of turnover, there are other things, including our ready – to – wear business, our service business. iPhone obviously had to do extremely well. We also gained market share the Mac. There are actually several vectors that work well for us.

2:39 pm : Amit Daryanani, RBC Capital Markets: How Does Apple Protect Csumer Data? How does this translate into positive for Apple over time?

2:40 pm : Tim Cook: We protect it by encrypting it. We retain the quantity or significant amount of information the device so that the user has ctrol over it. We also collect a lot less data than others. If you look at our model, if we can cvince you to buy an iPhone or an iPad, we earn a little mey. You are not our product. Privacy is a basic human right. Extremely complex situati if you are a user, to understand a lot of user agreements and so . We have always csidered that our role is to make things as simple as possible and to provide them with a level of cfidentiality and security.

2:41 pm : Steven Milunovich, UBS: Could you talk a little bit about the allocati of capital? The 16% dividend increase was relatively low, does this mean that you think that the price of your stock is very attractive? Can you talk more about your net-cash-zero goal?

2:43 pm : Luca Maestri: When we move to capital allocati decisis, the opportunity for us to do M & A a ctinuous basis, but when it's about dividends and redemptis, our view is that for various reass we see a lot of value in our stock. We believe that it is undervalued. We therefore strgly believe in redemptis … mainly. We do not give an end date to our capital repayment program this time because the amount is very important. We will try to run it at a very fast pace, but also efficiently … look at our record of the last five years. That is, we want to buy our stock at the right time. We will inform you of our activities at the end of each quarter. In 12 mths we will have an update of the whole program. Thus, you will be able to follow our progress every 90 days.

2:43 pm : Milunovich asks a follow-up questi Apple's interests in health care.

2:44 pm : Tim Cook mentis ResearchKit, CareKit, and Health Records iOS 11.3. All those who went out to involve them significantly in the Apple Watch and sort of pull the strings, so to speak. We also have a heart study going . So, I do not want to say too much, but it is an area of ​​great interest to which we think we can make a big difference. This is an important strategic area for us.

2:46 pm : Tim Cook India: We set a new revenue record in the first half. We ctinue to put a lot of energy into it. Over time, our goal is to go forward with all our different initiatives, from retail to everything else. It's a huge market. Many people will move into the middle class over time, as we have seen in other countries.

2:47 pm : Tim Cook China: I ctinue to believe that China is a phenomenal country with a lot of market opportunities. We have nearly 2 milli applicati developers in China, writing apps for iOS and the App Store. They do an incredibly creative and innovative job. We globally csider China to be not just a market … the market side, the iPhone X, as I mentied before, was the best-selling smartphe in the country at the last quarter … I'm thinking of a 90-day clock things can happen, but my persal visi of China is that it's a great market. We are certainly looking beyd 90 days and we are very optimistic about the opportunities and the envirment. The market for us is more than just the iPhone. Mac has gained shares there too. The watch is gaining ground. The services are doing very well. Several catalysts. I am very pleased with the results we were able to show during the quarter.

2:49 pm : Tim Cook the pricing strategy of the iPhone: We value the value we offer. iPhone X is the most innovative product the market. Jam stuffed with technologies the market. Really set up the smartphe for the next decade. This is how we evaluated it. We were somewhat surprised that throughout this period, the iPhone X has lined up with the most popular for each week since its launch, so I think it's a highlight. And it is # 1 in China. Another powerful point. Of course, at some point, if these technologies move to lower prices, there are probably more unitary demands. But the way we think about it is to try to have a reasable price for what we have delivered.

2:52 pm : Luca Maestri expects prices of NAND and DRAM compents to stabilize in the foreseeable future.

14:53 pm : Citi's Jim Suva asks if Apple thinks that the iPhone's market share can increase significantly in India, and if investors should start looking for a gross margin up.

2:56 pm : Tim Cook: As for the market in general, if you look back last year, there were still half a billi phes with features sold in the world. Many of those sold in emerging markets. Not all, but a lot of them. We still believe that with time, every phe sold will be a smartphe. It seems to us that the sale of many feature films is a very good opportunity. As for the iPhone itself, even though we sell a number of phes over the course of a year, our global market share is small – sales are low by compared to the entire market. Our goal is to cvince people with another type of phe to change, while taking care of people with an iPhone so that when they choose to buy another phe, they buy another iPhone. So we spend a lot of time it … India is the third largest smartphe market in the world. Obviously huge opportunities there. Extremely low share in this global market. We put a lot of energy there. Work with carriers in this market and they invest heavily LTE networks. The infrastructure has come a lg way since we started to devote a lot of energy – through their leadership and so . I do not buy the opini that the market is saturated. I think in a way that the smartphe market is the best category of products in the history of the world of csumpti.

14:59 : The cference call from Apple is over. Apple says that a summary of the call will be available around 5:30 pm. Pacific Time at Stay tuned to for more coverage.

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