This afternoon, Apple announced their earnings for the second quarter of their 2018 fiscal year, and the company has set a new revenue record for the quarter with $61.1 billion in revenue. Apple had a gross margin of 38.3% for the quarter, down slightly from the 38.9% margin a year ago. Operating income for the quarter was up 12.7% to $15.9 billion, and net income was up 25% to $13.8 billion. Earnings per share came in at $2.73, up 30% from a year ago.

Apple Q2 2018 Financial Results (GAAP)
  Q2'2018 Q1'2018 Q2'2017
Revenue (in Billions USD) $61.137 $88.293 $52.896
Gross Margin (in Billions USD) $23.422 $33.912 $20.591
Operating Income (in Billions USD) $15.894 $26.274 $14.097
Net Income (in Billions USD) $13.822 $20.065 $11.029
Margins 38.3% 38.4% 38.9%
Earnings per Share (in USD) $2.73 $3.92 $2.10

As always with Apple, the bulk of their revenue came from the iPhone, which pulled in $38.0 billion this quarter on sales of 52.2 million devices. Apple doesn’t break down which phones were sold, but Tim Cook did say “Customers chose iPhone X more than any other iPhone each week in the March quarter” and that’s clear from the revenue, which was up 14% from last year, on only 3% unit sales increase, so the average selling price for iPhone is now $728.34.

iPad had a small gain in sales this quarter as well, with 9.1 million devices sold, which is up 2% from a year ago. Revenue for iPad was $4.1 billion, which was up 6%, so like iPhone, Apple is earning more per device sold than previously.

Mac sales slumped, down 3% from a year ago to 4.1 million Macs sold, but thanks to higher revenue per device for Mac as well, the revenue was flat compared to last year.

While iPad and Mac were once the other horses in the Apple stable, they’ve been eclipsed by Apple’s services, which includes digital content, AppleCare, Apple Pay, and other services. Apple had revenues of $9.2 billion for this quarter on services alone, which is growth of 31% from last year. Unlike their other products, the services also didn’t dip from the Christmas quarter either, with sequential growth of 8% compared to Q1 2018.

Apple Q2 2018 Device Sales (thousands)
  Q2'2018 Q1'2018 Q'2017 Seq Change Year/Year Change
iPhone 52,217 77,316 50,763 -38% +3%
iPad 9,113 13,170 8,922 -31% +2%
Mac 4,078 5,112 4,199 -20% -3%

Apple’s Other Products, which includes AirPods, Apple TV, Apple Watch, Beats, iPod, and accessories, also continues to have strong growth, with $3.9 billion in revenue for the quarter, which is up 38% from a year ago.

Despite concerns about iPhone X sales by analysts, Apple has yet again set the bar on how to print money. And, they’ve done it with the iPhone only being 62% of their revenue for this quarter. It’s been well over 70-75% in the past. At the growth rate of services, it’s close to the combined revenue of the iPad and the Mac.

Apple has also announced a further $100 billion in shares will be repurchased, and they are raising the dividend 16%. For the third quarter, they are projecting revenue between 51.5 and 53.5 billion, with margins between 38 and 38.5%.

Source: Apple Investor Relations

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  • osxandwindows - Tuesday, May 1, 2018 - link

    CAn't believe they haven't passed $180 yet.
  • osxandwindows - Tuesday, May 1, 2018 - link

    Than again, AAPL has always been under valued.
  • mdriftmeyer - Tuesday, May 1, 2018 - link

    It's called shorting the stock 3 weeks ago, flooding the business news sites with false narratives, drive the stock down to under $160, and miraculously it is now back at $175 in after hours trading.
  • Samus - Wednesday, May 2, 2018 - link

    I can't believe they sold 52 million iPhones when...let's be honest here...the iPhone 8 is literally an iPhone 7 with wireless charging and a faster SoC, and the iPhone X has pretty mixed customer satisfaction.

    It's pretty obvious Apple timed this very well to nab the iPhone 6 users looking to upgrade from their 3 year old clunkers. I would imagine anybody upgrading from a 6S would be disappointed to lose their headphone jack at the expense of negligible performance increase, and iPhone 7 users upgrading to the 8 would likely have a hard time even noticing they upgraded at all.

    The other astonishing thing is BatteryGate doesn't seem to have affected them at all, reputationally or financially.
  • id4andrei - Wednesday, May 2, 2018 - link

    The lawsuits will affect them, they just haven't started yet. It also affects older iphones, respectively 6, 6s and 7. Still Apple's image has resisted in the mind of the average consumer and it helps that Tim Cook is a liberal superhero. Plays the public discourse like a politician.
  • The Garden Variety - Wednesday, May 2, 2018 - link

    "You'll see! YOU'LL ALL SEE!!!" yelled id4andrei at his screen, bringing his fists down with a sharp bang on his desk. The vibrations caused the liquid in his computer's cooling system to gurgle for a moment, then all was silent save for the predictable gentle hum of its fans. He rolled back in his chair, stared down at the ground, and exhaled loudly.
  • id4andrei - Wednesday, May 2, 2018 - link

    Conservative estimates are around 10 billion. Right now as we speak there are tens of millions of people walking around with throttled iphones not knowing they bought an inherently flawed smartphone.
  • melgross - Wednesday, May 2, 2018 - link

    No, not at all true. Why do people make ridiculous statements like that? It’s a new phone. Literally, everything inside is new.

    Batterygate is total BS. Apple had, on its site from the beginning, what they were doing in case of a weak battery. People are just too lazy to read. Now, they’re being more than generous in giving a battery exchange for $29, including labor.
  • id4andrei - Wednesday, May 2, 2018 - link

    Your post is absolutely ridiculous. This has nothing to do with a weak battery. This has everything to do with a power hungry SoC and possibly flawed power regulating chips from Dialog, which Apple kicked to the curb.

    What's your explanation for users with throttled iphones and batteries OK'd by Apple's own diagnostics?
  • melgross - Thursday, May 3, 2018 - link

    Apple’s SoC is more efficient than those from Qualcomm, and particularly Samsung. You can try to make things up, but it’s still false.

    The problem, which android makers have too, is that old batteries can’t power a sudden high usage rate, and so the phone stumbles. Apple attempted to mitigate that by slowing the phone when those heavy usage calls were made, and that’s about it. Read about this, and you’ll understand.

    What does it mean that a battery is ok? It means that it can take a charge and has some minimum amount of storage available. It doesn’t mean that an old one is adequate for for intensive gaming. All of the batteries in this problem area are older ones that have lost the ability to take a full charge.

    It’s not all of the batteries in the older phones either, just some.

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