This afternoon Apple announced their earnings, and for the quarter, they had record revenues of $88.293 billion, which is up 13% from the same quarter a year ago. Margins were down 0.1% to 38.4%. Apple had an operating income of $26.274 billion, up 16.2%, and a net income of $20.065 billion, up 12.1%, which translated to earnings per share of $3.92, up from $3.38 a year ago.

Apple Q1 2018 Financial Results (GAAP)
  Q1'2018 Q4'2017 Q1'2017
Revenue (in Billions USD) $88.293 $52.579 $78.351
Gross Margin (in Billions USD) $33.912 $19.931 $30.176
Operating Income (in Billions USD) $26.274 $13.120 $23.359
Net Income (in Billions USD) $20.065 $10.714 $17.891
Margins 38.4% 37.9% 38.5%
Earnings per Share (in USD) $3.92 $2.08 $3.38

As usual, Apple’s iPhone continues to be the driving force behind Apple’s earnings. For the quarter, unit sales were down 1% from a year ago, but revenue was up 13%. Apple sold 77.3 million iPhones this quarter, with an average selling price of a staggering $796 per phone sold. It seems like Apple’s answer to a saturated market is to increase prices, and, at least for this quarter, it’s worked. Apple announced the iPhone X was the top-selling iPhone every week since it shipped in November.

iPad sales have leveled off for now, after declining for several years. For the quarter, Apple sold 13.2 million iPads, which is up 1% from a year ago. As with iPhone, revenue was up more than sales, at 6% gain, for revenue of $5.862 billion for the quarter. That works out to an ASP of $445.10 per iPad, so despite the lower priced iPad models, Apple is still selling enough Pros to continue to grow revenue.

Mac sales fell 5% in both terms of units sold and revenue. Apple sold 5.1 million Macs this quarter, compared to 5.3 million a year ago. Revenues were $6.9 billion, so ASP for Mac is $1348.78. The latest Mac refresh hasn’t been able to continue Apple’s record of outperforming the PC market, and for this quarter it looks like the rest of the PC market actually outperformed the Mac.

Services continue to grow, and has been the second largest part of Apple’s business for some time now. Revenues for services were up 18% for the quarter to $8.471 billion. Apple announced they have an install base of 1.3 billion active users now, and their users seem to be more eager to spend money with Apple, so even though Apple’s not known as a services company, they are likely very pleased with the growth they’ve seen here.

Apple’s Other Products is the collection of devices Apple doesn’t want to announce individual unit sales for, and includes Apple TV, Apple Watch, Beats, iPod, and accessories. For the quarter, revenues grew 36% to $5.489 billion, and it’s about to overtake iPad revenues at the growth rate they’ve been seeing.

Apple Q1 2018 Device Sales (thousands)
  Q1'2018 Q4'2017 Q1'2017 Seq Change Year/Year Change
iPhone 77,316 46,677 78,290 +66% -1%
iPad 13,170 10,326 13,081 +28% +1%
Mac 5,112 5,386 5,374 -5% -5%

It was inevitable that the phone market would saturate at some point, and Apple seems to have run into that wall after a decade of growth. Their higher priced items appear to be the way to continue revenue growth for the time being, and the record revenues this quarter are a testament to that working. This is always the big quarter for Apple though, so we’ll have to watch and see how they do the rest of their fiscal year.

Source: Apple Investor Relations

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  • catinthefurnace - Thursday, February 1, 2018 - link

    Might want to add that this years quarter was a week shorter than last years. If this is taken into account, iPhone sales were not actually down
  • zepi - Friday, February 2, 2018 - link

    Why is that Intel and MSFT took big one-off tax hits, but here it is not mentioned? I was under assumption that one idea of tax code change in US was to tax the money these tech giants have held abroad?
  • name99 - Friday, February 2, 2018 - link

    Uhhm because that has nothing to do with the sales numbers (either units, or revenue) and that's what most people on AnandTech care about because they indicate something about Apple's future tech directions (eg likely to see AirPods v2 at some point this year?)

    Tax law changes affect the stock price, but if you're reading AnandTech to learn about stock price issues, you might want to reconsider your internet habits.
  • shabby - Thursday, February 1, 2018 - link

    Gotta hand it to apple, the amount of money that they make from basically a handful of products is staggering, no other company has such a slim portfolio of products that makes this much money.
  • catinthefurnace - Thursday, February 1, 2018 - link

    To be fair, no company makes this much money no matter how many products they have
  • shabby - Friday, February 2, 2018 - link

  • iwod - Friday, February 2, 2018 - link

    Only in revenue though.
  • shabby - Friday, February 2, 2018 - link

    I thought their 2017 profits matched apples, well have to look for that again
  • jtd871 - Friday, February 2, 2018 - link

    Don't forget they get a piece of all the app and media purchases thru their store.
  • deepblue08 - Friday, February 2, 2018 - link

    To add to that, 80%ish of Apple's profit comes from a single product - iPhone. That explains why they are investing heavily into services now.

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