Nov 2, 2017

Apple crushes expectations, sees record holiday quarter

Apple CEO Tim Cook during a new-product announcement last year in Cupertino, CA. Photo: Marcio Jose Sanchez / AP

Apple on Thursday reported sales and earnings well ahead of projections and, importantly, also said holiday sales should be a record and ahead of many analysts' expectations. Its sales of 46.6 million iPhones last quarter came in about 500,000 units ahead of expectations.

Shares soared in after-hours trading to a new record, changing hands recently at $173.72, up $5.61, or more than 3%.

Why it matters: Going into the earnings report, there were concerns about both iPhone 8 demand and iPhone X supply. Thursday's report should go a long way toward answering those questions.

Sales were up in every region except Japan, where business was down from the prior year, though up sequentially. Notably, the company finally saw a much-needed turnaround in Greater China, where sales of $9.8 billion were up 22% from the prior quarter and 12% from a year ago. The company's business has been weak in China for some time, though the company had predicted improvement this quarter.

By the numbers:

Last quarter

  • Revenue: $52.6 billion (vs $51.2 billion estimated)
  • Per-share earnings $2.02 (vs. $1.87 estimated)
  • iPhones sold. 46.6 million (vs 46.1 million estimated)
  • iPads sold: 10.3 million (vs about 10 million expected)
  • Macs sold: 5.4 million (vs about 5 million expected)
  • Services revenue: $8.5 billion (up from $7.3 billion last quarter and $6.3 billion a year ago)

Current quarter forecast

  • Revenue: $84 billion to $87 billion (vs expectations of around $83 billion)

Highlights from the earnings conference call (in progress)

  • Apple Watch unit growth was more than 50% for the third consecutive quarter (though Apple didn't give specific numbers)
  • In Greater China, Apple saw unit growth and market share gains for iPhone, iPad and Mac, with Mac sales and services revenue in China at record levels.
  • Business in emerging markets outside China was up 40%, with sales in India double those of a year earlier.
  • Cook said Apple's wearables business (Apple Watch + AirPods, etc) would be a Fortune 400 company by itself. (No. 400 on the Fortune 500 list, Calpine, had revenue of $6.7 billion last year.)
  • Manufacturing of the iPhone X is going well, Cook said; However, he said he can't say when supply will match demand.
  • Cook wouldn't say how the iPhone 8 Plus sales compared to the standard model, but did say that it is off to the fastest start of any Plus model, which he said was a positive surprise.
  • Apple says its music business, which had been in decline, is once again growing thanks to Apple Music.
  • iCloud is growing at double digits and the services business overall is the size of a Fortune 100 business.

Go deeper

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 9 p.m. ET: 662,073 — Total deaths: 30,780 — Total recoveries: 139,426.
  2. U.S.: Leads the world in cases. Total confirmed cases as of 9 p.m. ET: 122,666 — Total deaths: 2,147 — Total recoveries: 1,073.
  3. Federal government latest: President Trump announces "strong" travel advisories for New York, New Jersey and Connecticut, rules out quarantine enforcement.
  4. State updates: Alaska is latest state to issue a stay-at-home order — New York is trying to nearly triple its hospital capacity in less than a month and has moved its presidential primary to June 23. Some Midwestern swing voters who backed Trump's handling of the virus less than two weeks ago are balking at his call for the U.S. to be "opened up" by Easter.
  5. World updates: In Spain, over 1,400 people were confirmed dead between Thursday to Saturday.
  6. 🚀 Space updates: OneWeb filed for bankruptcy amid the novel coronavirus pandemic.
  7. Hollywood: Tom Hanks and Rita Wilson have returned to U.S. after being treated for coronavirus.
  8. What should I do? Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk
  9. Other resources: CDC on how to avoid the virus, what to do if you get it.

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Trump flags travel adversaries for New York, New Jersey, Connecticut

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Andrew Witherspoon/Axios

President Trump said Saturday night the CDC would issue a "strong" travel advisory" for New York, New Jersey and Connecticut and that a "quarantine will not be necessary."

The big picture: With more than 121,000 people infected, the U.S. has the most COVID-19 cases in the world, exceeding China and Italy, per data from Johns Hopkins. A second wave of American cities, including Boston, Detroit, New Orleans and Philadelphia, are reporting influxes of cases.

Go deeperArrowUpdated 9 mins ago - Health

Trump rules out quarantine in New York, New Jersey, Connecticut after pushback

President Trump on the White House grounds on Saturdya. Photo: Sarah Silbiger/Getty Images

President Trump tweeted Saturday night that he's decided not to introduce quarantine enforcement measures fo New York, New Jersey and parts of Connecticut, but a "strong" travel advisory will be issued for those states.

Why it matters: The president said hours earlier he was considering the move to combat the rise in novel coronavirus cases. But he received pushback, most notably from New York Gov. Andrew Cuomo (D), who told CNN it would cause "chaos." "This would be a federal declaration of war on states," Cuomo added.

Go deeper: Updates on coronavirus in the U.S.