The time has come! On April 28, after the closing bell, Apple (AAPL) – Get Apple Inc. the report will report the results of the second fiscal quarter. the apple expert will follow the event in real time, through a live blog. To skip the intro and earnings preview summary, scroll down to “live blog starts here“.
Our coverage begins shortly after 4 p.m. m. est, or 1 p.m. peaceful. expect the press release to go out around 1:30 p.m. pst, and the earnings call starts thirty minutes later. the meeting should last about an hour, with Q&A ending around 3 p.m. m. pst.
Reading: Apple earnings blog
(read more from apple expert: apple’s previous earnings: iphone should be a killer in Q2)
We’ve been seeing a preview of Apple’s earnings for the past few days. Below is a brief summary of what you can expect tonight:
- wall street seems to agree that this will be a good quarter for apple. consensus estimates for revenue growth and eps are 5% and 2%, respectively, but i think the cupertino-based company will do better than this.
- iphone is likely to impress thanks to strong demand for the iphone 13 and perhaps the newly released se.
- the mac will probably do well too, along with the services segment as the installed base and device usage continues growing. a shift in the revenue mix toward services should also be positive for margins.
- meanwhile, the ipad and wearables could be the pain points, as a result of supply chain challenges .
- I doubt it. the management team will provide strong guidance, especially on earnings. but pay close attention to the narrative about apple’s performance in the coming months, as macroeconomic challenges (eg, inflation, economic slowdown in some parts of the world) continue to mount.
- stocks Apple head to day earnings 14% below all-time high. could recent share price weakness set shares up for a rally, in case of decent results?
(read more from apple expert: apple’s previous earnings: could ipad or wearables steal the show?)
live blog starts here!
2:59 PM m. pst: the conference call is over! thanks for being with us today, have a great night!
2:58 PM m. pst: Question about freight and geographic production footprint. CEO says it’s a big challenge today, both in cost and availability. the focus now is to meet demand. going forward, the approach would be to do it more efficiently.
2:56 PM m. pst: Question about services and the divide between consumers and businesses. the CFO says the consumer is the primary focus, although the business is also a source of potential growth. apple is active in both verticals.
2:53 PM m. pst: question about the use of cash, why not acquire strategic assets? netflix mentioned? The CEO says Apple already does this, and the company wouldn’t rule out bigger mergers and acquisitions. this is an interesting comment
2:52 PM m. pst: Question about the revenue guidance, the drag from $4bn to $8bn…the CFO kind of repeats what’s already been said. he adds that fx should be a 300bp drag for the fiscal third quarter, and russia should be a 150bp drag. the good news is that the demand is still strong, the iphone 13 works very well.
2:49 PM m. pst: question about the app store and impact on this business. CFO says it’s too early to tell.
2:48 PM m. pst – Ask about supply restriction again. Chief Financial Officer Maestri says the restrictions were limited to silicon shortages, but now restrictions in China due to covid-19 are now playing a role as well.
2:46 PM m. pst – Question about slowing service growth, is this 17% rate what should be expected going forward (see chart above to help visualize)? the financial director is satisfied with the performance of the segment, the installed base of loans, the use and the new services launched. luca says that covid-19 can distort the image a bit. for the next quarter alone, expect less than 17% growth due to fx and russia.
2:43 PM m. pst: question about demand for se vs. previous se cycles. Tim doesn’t want to go into that level of detail, he says that the smartphone segment in general is doing well on the back of the iPhone 13 family.
2:41 PM m. pst: monitoring of the moment of balance of the offer. tim doesn’t want to predict it, there is still a lot to know about supply, demand and economic strength. “there are different levels of results.”
2:40 PM m. pst: Question about whether apple will rethink supply chain and inventory management after all the current issues are in the rearview mirror. tim is “waiting for that day”. says that the supply chain is global, apple will continue to seek to optimize it. The CEO is pleased with the performance of the supply chain in this difficult environment. the company continues to learn and adapt, but remember that holding inventory (for example, having a silicon buffer) is not a good thing in this industry.
2:37 PM m. pst – question on request outside of russia and other questioned sub-segments. happy ceo with iphone against difficult comps. America did pretty well, us specifically.
2:37 PM m. pst: more questions about the revenue drag from $4 billion to $8 billion. the CEO reiterates that the impact will be for most product categories, but that the company will try to minimize the impact.
2:35 PM m. pst – Question about component inflation and the impact on apple’s pricing power. CEO says costs for some components are falling, others rising. apple is doing a good job overcoming the challenges.
2:33 PM m. pst – More supply restriction questions. Tim elaborates, saying that almost all final assembly plants have been restarted in China.
2:31 PM m. pst: question about the impact on the supply chain, is this demand delayed or demand destroyed? Tim says that something is lost, something can be recovered, but it is difficult to predict. additionally, most product categories will be affected by this issue.
2:30 PM m. pst: question about the division of the geographical segment. America was strong, the CFO is happy. europe was good, despite the impact of russia — western europe was solid. China was a record March quarter, but the timing of the iPhone launch played a role. japan and apac affected by headwinds fx.
2:27 PM m. pst: Q&As start with a broad macro question. Tim Cook says that Apple sees inflation, which is seeping into gross margin and operating expenses. the CEO is monitoring the impact on consumer behavior and demand, but the main focus remains on the supply side. Regarding supply, the silicon shortage and the impact of covid-19 in Asia should continue, mainly around the Shanghai corridor. but tim sees an increase as installations restart, he sees reason for optimism.
2:24 PM m. pst: gross margin targeting 42% to 43%; opex, at $12.7 billion to $12.9 billion; other income to negative $100; tax rate of 16%.
2:22 PM m. pst: no specific income targeting, as usual. YoY sales performance should be affected by supply constraints, shortages. the impact should be $4 billion to $8 billion, much higher than recently. aapl shares drop after these comments.
2:21 PM m. pst – $90bn boosted share buyback which I think is better than expected. next, prospects for the next quarter.
2:20 PM m. pst: Cash review… $193 billion cash and equivalents, $73 billion net of debt.
2:20 PM m. pst: luca maestri now reviews some profits from trading contracts on iphone and ipad.
2:19 PM m. pst: Growing installed base and customer engagement are drivers of service growth. paid subscribers reached 825 million, up 165 million in the last 12 months.
2:17 PM m. pst: watch mentioned as featured in wearables.
2:17 PM m. pst: ipad air stays strong; half of the sales were from new users who didn’t have an ipad before.
2:16 PM m. pst: mac revenue increased with macbook pro powered by m1. the last 7 quarters have been the best 7 quarters ever. m1 has truly been a game changer for apple’s computer business.
2:15 PM m. pst: iphone revenue up 5%, iphone 13 and se to credit. developed and emerging markets did equally well. satisfaction at a high level.
2:14 PM m. pst: gross margin benefited by a favorable mix. the mix was also positive on service margins.
2:13 PM m. pst: CFO Luca Maestri has the microphone now.
2:12 PM m. pst: tim cook mentions the challenges: war, covid-19, silicon shortage. but he seems confident that apple will handle the problems well.
2:10 PM m. pst – As the CEO continues to talk about the highlights of the quarter, aapl is still down… -1%. Stocks quickly lost steam!
2:08 PM m. pst: coda mentioned for his academy award. we recently talked about it here.
2:07 PM m. pst: tim cook also praises ipad and watch series 7. the story so far remains the same: strong demand. this is expected from prepared comments.
2:06 PM m. pst: iphone is mentioned as positive. apple stock now turns negative after hours. oops!
2:05 PM m. pst: CEO says Mac has suffered supply chain disruptions, but segment still performed well thanks to Apple’s m1 family of chips.
2:02 PM m. pst: Apple shares start earnings call just 0.5% higher outside of business hours.
2:01 PM m. pst: The call is in progress. Disclaimers first, then CEO Tim Cook, then CFO Luca Maestri. finally, the questions and answers should start in about 30 minutes.
1:59 PM m. pst: Those who wish to listen to the earnings call can do so here.
1:57 PM m. pst: apple earnings call starts in 3 minutes! let’s dive in soon…
1:56 PM m. pst: Apple stocks were up +1.6% after hours. I think if stocks hadn’t risen +4.5% during the day, they would be reacting better to this strong earnings impression.
1:54 PM m. pst: To clarify, the +20% below is based on the fiscal year, i.e. the last six months.
1:53 PM m. pst: Cash flow from operations increased 20% year over year. this is impressive, considering eps growth of “only” 9%. Despite the tough environment, Apple continues to manage its cash very well!
1:51 PM m. pst: Operating expenses were 12.9% of revenue versus 11.7% this time last year. It will be interesting to hear any comments from the company on this cost increase.
1:49 PM m. pst: On gross margin, I had anticipated 43.3% due, in part, to a shift in the revenue mix toward high-end products and services. I thought I was too optimistic here. Turns out I wasn’t optimistic enough!
1:48 PM m. pst – Looking around the P&L, I’m impressed by the 43.7% gross margin. this is a year-over-year increase of more than a percentage point: last year’s gross margin was up a whopping 4 percentage points.
1:46 PM m. pst – Tim Cook shared a brief comment with cnbc. he sounded very optimistic, as he should. The CEO noted, however, that supply chain issues continue to plague the iPad segment.
1:45 PM m. pst: america was the strong geographical segment, with an increase of +19%. big china up +3% is very good news in my opinion. this was an area of concern.
1:43 PM m. pst : the iphone did not lead the pack, as he expected. but wearables did well, and the mac actually held up against very tough computers.
1:42 PM m. pst: ok, here are a couple of graphs…
1:38 PM m. pst: Just give me a few minutes, I’ll update my model and I’ll be back soon.
1:37 PM m. pst: wedbush’s dan ives says: “print this earnings report and frame it.” Apple stocks increased 2% after business hours.
1:35 PM m. pst – Services growth slightly outperformed consensus, but was a slowdown compared to recent quarters.
1:35 PM m. pst: iPhone revenue of $50.6bn vs. $47.9bn consensus and my estimate of $53.7bn. ok, i was a bit too optimistic here, but the number still looks pretty good compared to the estimates.
1:33 PM m. pst: Total revenue of $97.3bn vs. $93.9bn consensus and my estimate of $95.5bn. It was a beautiful top-of-the-line hit, almost 9% revenue growth!
1:32 PM m. pst: $1.52 eps vs. $1.43 consensus and my estimate of $1.53.
1:31 PM m. pst: better revenue, better eps, better iphone… 5% dividend increase, $90 billion buyback increase. This is all good news so far!
1:30 PM m. pst: even higher, heading for +4%! The numbers are here!
1:30 PM m. pst: aapl shares go up! +2%!
1:27 PM m. pst: Apple stocks are hovering flat now, recovering small losses from a few minutes ago… almost time! only 3 minutes left! I’m so ready for this, come on!
1:26 PM m. pst: Also, will apple announce an increase in share buyback authorization and an increase in dividends? $70 billion and 5%, respectively, would probably be the numbers to beat here.
1:24 PM m. pst – back to earnings preview i think iphone and mac will shine. i’m a bit worried about ipad and portable devices. larger porcelain may also come soft. then i will be curious to hear from the management team about europe (another potential weak spot) and sales expectations for the summer season.
1:22 PM m. pst – In later hours, the nasdaq 100 is giving up about a third of its regular session gains. Note that Amazon accounts for 7% of that index, but Apple accounts for almost 13%. aapl will be a great story, appearing in just 8 minutes!
1:19 PM m. pst: wedbush’s dan ives is on cnbc right now, sounds as upbeat as ever on apple and iphone. I agree with him.
1:18 PM m. pst: For those following other stocks, roku is trading higher on the back of its earnings report, but robinhood is suffering. amazon falls -9%. apple holds up, but still in negative territory.
1:17 PM m. pst: how do you think apple will perform today? you still have 15 minutes maximum to participate below:
1:15 PM m. pst – In after-hours trading, Apple shares are still down, but now just -0.4%. Compared to the all-time high of around $182, AAPL is down 10%, barely into correction territory.
1:14 PM m. pst: another look at wall street expectations for apple… 5% revenue growth and 2% eps growth is the reference point. I did my own estimate and I think apple will see 7% revenue growth and 10% eps growth. Let’s see what happens in 15-20 minutes!
1:11 PM m. pst – However, apple stocks fell -1.5% in later hours.
1:10 PM m. pst: is intel a good read for apple’s mac business? i would say no apple seems to be doing very well on pc, better than its peers, buoyed by the introduction of the m1 chip. I wouldn’t worry here.
1:08 PM m. pst: FYI, Intel (intc) – Get Report from Intel Corporation has also released results, and the stock is also down due to soft guidance… -4 % after hours. Not a great start for technology tonight!
1:07 PM m. pst – So, as a quick recap… results from apple will be posted around 1:30 p.m. m. pst, that is, in about 20-25 minutes, and the earnings call starts half an hour later.
1:06 PM m. pst: apple stock is down -0.5% after hours… but this is probably just sympathy, after amazon’s poorly received results. expect a more significant move in aapl’s share price in about 25 minutes.
1:05 PM m. pst: back to the market. Apple investors should be pleased with this strong day of performance, but those who were hoping to see fiscal second quarter results before buying shares may be disappointed by this strong rebound from previous earnings.
1:03 PM m. pst: by the way, amazon earnings are in… and the stock is down -10% in after-hours trading! Oh! apple report w