Summary
Apple Inc.'s (AAPL) 10-Q filing for the quarter ending December 28, 2018, reveals a slight year-over-year decline in total net sales, primarily driven by a decrease in iPhone sales. However, this was partially offset by robust growth in Wearables, Home and Accessories, and Services segments. The company reported a net income of $19.97 billion, with diluted earnings per share of $4.18, demonstrating continued profitability despite a challenging sales environment for its flagship product. Operationally, Apple maintained strong cost controls, though R&D and SG&A expenses saw increases, reflecting continued investment in innovation. The company continued its significant capital return program, repurchasing $8.2 billion in stock and paying $3.6 billion in dividends during the quarter, underscoring its commitment to shareholder value. Despite the sales dip, Apple's financial position remains strong, with substantial cash reserves and a focus on expanding its high-margin Services business.
Financial Highlights
55 data points| Revenue | $84.31B |
| Cost of Revenue | $52.28B |
| Gross Profit | $32.03B |
| R&D Expenses | $3.90B |
| SG&A Expenses | $4.78B |
| Operating Expenses | $8.69B |
| Operating Income | $23.35B |
| Interest Expense | $890.00M |
| Net Income | $19.96B |
| EPS (Basic) | $1.05 |
| EPS (Diluted) | $1.05 |
| Shares Outstanding (Basic) | 18.94B |
| Shares Outstanding (Diluted) | 19.09B |
Key Highlights
- 1Total net sales decreased by 5% to $84.31 billion compared to the prior year's quarter, primarily due to a 15% decline in iPhone sales ($51.98 billion vs. $61.10 billion).
- 2Growth in Services revenue was strong, increasing by 19% to $10.88 billion, and Wearables, Home and Accessories saw a significant 33% increase to $7.31 billion.
- 3Net income remained stable at $19.97 billion compared to $20.07 billion in the prior year, with diluted EPS increasing to $4.18 from $3.89.
- 4Operating income saw a decrease to $23.35 billion from $26.27 billion, reflecting higher operating expenses, particularly in R&D and SG&A.
- 5Apple returned $11.8 billion to shareholders through $8.2 billion in share repurchases and $3.6 billion in dividends and dividend equivalents during the quarter.
- 6The company maintained a strong cash position, with cash and cash equivalents increasing to $44.77 billion.
- 7Geographically, Greater China sales saw a significant 27% decrease, while the Americas region showed a 5% increase in net sales.