Apple Slightly Beats Expectations in Latest Earnings Report

Photo Credit: Richard Drew/AP/Shutterstock
April 30, 2019

By Spencer Feingold

Apple released its second-quarter earnings Tuesday afternoon after the bell, posting revenue of $58.02 billion, a drop of 5 percent from this time last year.

The earnings, however, just slightly beat the expected revenue of $57.37 billion, according to analysts surveyed by Thomson Reuters. Apple also reported earnings per share of $2.46, which is down 10 percent from 2018 but up from the predicted $2.36.

The release was Apple’s first earnings report since the company unveiled Apple TV+, its long-awaited original video subscription platform, and other services.

As one of the largest companies in the world, Apple ($AAPL) is watched closely by Wall Street and investors that eagerly track the company’s enormous growth — Apple became the first U.S. public company to be valued at over $1 trillion in August of 2018.

Apple’s earnings, however, come after a period of declining revenue due to falling iPhone sales. In its 2019 first-quarter earnings report, Apple reported that iPhone sales dropped 15 percent from a year prior. However, total revenue from all other products and services grew 19 percent.

“We generated operating cash flow of $11.2 billion in the March quarter and continued to make significant investments in all areas of our business,” Luca Maestri, Apple’s chief financial officer, said in a statement.

Tuesday’s earnings follow Apple’s major event on March 25, which announced Apple TV+ as well as several other services such as Apple News+, Apple Arcade, and the Apple Credit Card.

The announcement made by CEO Tim Cook and other executives marked a new chapter in Apple’s history as the company moves away from its well known hardware business and shifts its focus to software-driven services.

Growth in services “will be key for Apple going forward,” Robert Luna, the CEO and chief investment strategist of the wealth management firm Surevest, told Cheddar.

The company’s revenue from services reached an all-time high in Q2 of $11.5 billion, an increase from the $10.9 billion in Q1.

“Our March quarter results show the continued strength of our installed base of over 1.4 billion active devices, as we set an all-time record for Services, and the strong momentum of our Wearables, Home and Accessories category, which set a new March quarter record,” Tim Cook, Apple’s CEO, said in a statement.