Apple (AAPL) shares closed 2.2% higher after the world’s largest company by market capitalization exceeded market expectations for the fiscal quarter ending September 2019, thanks to solid iPhone sales. For the fourth fiscal quarter, service revenues even peaked at $12.5 billion. Earnings per share reached a record fourth quarter of $3.03 – up from $2.84 consensus. In the quarter ended September, the firm’s revenues totaled $64 billion, up 2% year-over-year, while the EPS increased by 4% to $3.03. International sales accounted for 60% of the total. The revenue consensus was about $63 billion.
Luca Maestri, the group’s chief financial officer, also highlights the record operating cash flow of $19.9 billion for the quarter, as well as the $21 billion returned to shareholders – $18 billion through share buybacks and 3.5 billion by dividends. The objective is to reach over time a net position of ‘neutral’ cash. Apple made $33.4 billion in revenue with its iPhone over the quarter closed, against $32.4 billion in consensus. This is the fourth consecutive quarter of year-on-year decline in iPhone sales. Apple is now on the new iPhone 11, cheaper than the entry-level iPhone XR, which should “bring more people to the market”,
For the first quarter of fiscal year 2020, the crucial holiday season, Apple expects revenues ranging from 85.5 to 89.5 billion dollars. The gross margin is anticipated between 37.5 and 38.5%. The operational expenses are expected between 9.6 and 9.8 billion. The tax rate is anticipated at 16.5%. Tim Cook, chief executive of the group, expects strong sales of wearables over the holiday season. The consensus was $86.9 billion in revenue. Note that Apple’s guidance takes into account the hope of a resolution of the Sino-US trade dispute, according to comments from Cook, quoted by Reuters. In the fourth fiscal quarter of 2019, Apple’s revenue in China fell 2.4%.
Facebook (FB) saw its stock move up by 1.8% after the social network giant unveiled quarterly accounts that exceeded market expectations. For the third fiscal quarter, the group achieved a net profit of $6.09 billion or $2.12 per share, against $5.14 billion and $1.76 per share a year earlier. Revenues climbed by 29% to $17.6 billion, against 13.7 billion a year earlier. Advertising revenues accounted for 98% of the total. The market consensus over the quarter was $1.91 in earnings per share and $17.4 billion in revenue. Mark Zuckerberg’s group has thus far exceeded market expectations.
The number of monthly active users, key measure of the performance of the Californian group, climbed another 8% to reach at 2.45 billion. Zuckerberg says about 2.8 billion people use Facebook and its properties (WhatsApp, Instagram or Messenger). The group is still on course, despite the major problems encountered in recent months, relating to antitrust and regulatory issues.