Apple's Q2 2019 Earnings Report: Steady as she goes...

Apple has just released its earnings for the second fiscal quarter of 2019. The company showed earnings that were in line with expectations, and Apple’s guidance for the third quarter was higher than Wall Street analysts had forecast. Shares of AAPL were up over 5% in after-hours trading.

  • EPS: $2.46 vs. $2.36 forecast by Refinitiv consensus estimates

  • Revenue: $58.02 billion vs. $57.37 billion forecast by Refinitiv consensus estimates

  • Q2 iPhone revenue: $31.05 billion vs. $31.03 billion, forecast by Refinitiv consensus estimates

  • Q2 services revenue: $11.45 billion vs. $11.37 billion, forecast by Refinitiv consensus estimates

  • Projected Q3 revenue: $52.5 to $54.5 billion vs. $51.94 billion forecast by Refinitiv consensus estimates

During the upcoming earnings call, Tim Cook is expected to announce that Apple’s performance in the critical Chinese market has improved over the previous quarter, and showed even greater strength toward the end of the quarter.

Apple will spend $75 billion on share repurchases and approved a dividend of $0.75 per share — that’s a five percent increase.

By product line, revenues were better than expected for iPad and wearables, and slightly lower for iPhone and Mac:

  • iPhone: $31.05 billion vs. $31.10 billion expected

  • iPad: $4.87 billion vs. $4.21 billion expected

  • Mac: $5.5 billion vs. $5.85 billion expected

  • Wearables: $5.1 billion vs. $4.79 billion expected

We’ll have more information about the earnings call later.

Here’s Apple’s press release about second quarter earnings:

Services Revenue Reaches New All-Time High of $11.5 Billion

Cupertino, California — April 30, 2019 — Apple today announced financial results for its fiscal 2019 second quarter ended March 30, 2019. The Company posted quarterly revenue of $58 billion, a decline of 5 percent from the year-ago quarter, and quarterly earnings per diluted share of $2.46, down 10 percent. International sales accounted for 61 percent of the quarter’s revenue.

“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,” said Tim Cook, Apple’s CEO. “We delivered our strongest iPad growth in six years, and we are as excited as ever about our pipeline of innovative hardware, software and services. We’re looking forward to sharing more with developers and customers at Apple’s 30th annual Worldwide Developers Conference in June.”

“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,” said Luca Maestri, Apple’s CFO. “We also returned over $27 billion to shareholders through share repurchases and dividends. Given our confidence in Apple’s future and the value we see in our stock, our Board has authorized an additional $75 billion for share repurchases. We are also raising our quarterly dividend for the seventh time in less than seven years.”

Reflecting the approved increase, Apple’s board of directors has declared a cash dividend of $0.77 per share of the Company’s common stock, an increase of 5 percent. The dividend is payable on May 16, 2019 to shareholders of record as of the close of business on May 13, 2019.

The management team and the Board will continue to review each element of the capital return program regularly and plan to provide an update on the program on an annual basis.

Apple is providing the following guidance for its fiscal 2019 third quarter:

  • revenue between $52.5 billion and $54.5 billion

  • gross margin between 37 percent and 38 percent

  • operating expenses between $8.7 billion and $8.8 billion

  • other income/(expense) of $250 million

  • tax rate of approximately 16.5 percent

Apple will provide live streaming of its Q2 2019 financial results conference call beginning at 2:00 p.m. PDT on April 30, 2019 at www.apple.com/investor/earnings-call/. This webcast will also be available for replay for approximately two weeks thereafter.

Apple periodically provides information for investors on its corporate website, apple.com, and its investors relations website, investor.apple.com. This includes press releases and other information about financial performance, reports filed or furnished with the SEC, information on corporate governance and details related to its annual meeting of shareholders.