Apple Q2 2018 financial results: $61.1bn, 52.2m iPhones sold | Tech News

Apple announced financial results for Q2 2018 (ended 31 March 2018) on 1 May 2018.

The company reported:

  • Quarterly revenue of $61.1 billion, up 16% compared to the year-ago quarter
  • Quarterly earnings per diluted share of $2.73, up 30% year-on-year
  • International sales bought 65% of Apple’s revenue for the quarter
  • Generated over $15 billion in operating cash flow.

Apple had predicted revenue between $60bn and $62bn when it gave guidance for the second quarter during the first quarter results.

While the revenue was within Apple’s targets, it was a better result than had been anticipated by Thomson Reuters, who predicted that Apple would report revenue of $60.84 billion for the quarter (a rise of 15%). Thomson Reuters expected net profit is to jump 24% to $13.68 billion.

Apple CEO Tim Cook highlighted the strong revenue growth in “iPhone, Services and Wearables”.

After reporting its results the company then held a conference call with analysts to discuss the success of specific products and its plans for the future.

How many iPhones did Apple sell in Q2 2018?

The results cover the first three months of the year, giving a good indication of how popular the iPhone X has turned out to be.

Apple CEO Tim Cook said: “Customers chose iPhone X more than any other iPhone each week in the March quarter, just as they did following its launch in the December quarter.”

52.2 million iPhones were sold in the quarter bringing $38 billion in revenue to Apple. In the same quarter of 2017, Apple sold 50.7m iPhones and made $33bn in revenue.

Analysts were predicting that Apple had sold about 52m to 53m iPhones in the quarter, so Apple’s sales were within those predictions, but likely there will still be some disappointment. 

Wall Street expected Apple to report $39.2 billion in revenue from iPhones for the quarter. The $38bn figure is less, however, it is still a 14% increase in revenue, compared to the year-ago quarter. During Apple’s results announcement in February 2018, CFO Luca Maestri told analysts to expect iPhone revenue to grow by 10% year-over-year in the second quarter, so this target was beaten.

The average selling price of an iPhone in the quarter is expected to be reported to have been $740, according to Bloomberg.

There are still likely to be concerns that demand for smartphones is slowing and that the iPhone X had not proven to be as popular as Apple hoped – many feel it was too expensive and that the high price will have resulted in reduced sales.

With the iPhone accounting for more than 60 percent of Apple’s revenue in 2017, there are concerns about how Apple will manage any reduction in sales. However, Apple CEO Tim Cook is looking towards growth opportunities offered by other services.

However, he also noted in the conference call with analysts that followed the results announcement that the smartphone market “is best market for a consumer product company in the history of the world. It’s a terrific market and we’re proud to be a part of it.”

Another cause of concern about a reduction in revenue from the iPhone category was Apple’s introduction of a reduced-price iPhone battery replacement scheme, following it’s acknowledgement that it had throttled batteries in older phones in order to prevent unexpected shutdowns due to worn batteries.

How many iPads did Apple sell in Q2 2018?

The launch of the new iPad happened just towards the end of the quarter.

In the second quarter Apple sold 9.1m iPads and made 4.1bn in revenue from those sales.

This compares favourably with the same quarter in 2017 when Apple sold 8.9m iPads and made 3.9bn. That’s a 6% increase in revenue year-on-year.

How many Macs did Apple sell in Q2 2018?

The iMac Pro was launched in the quarter. But the rest of the Mac line up is expected to be updated in the next few months, so sales were expected to have been slow.

However, Apple sold 4m Macs in the quarter, and made $5.8bn revenue from those sales.

The Mac sales were slighly lower than the same quarter in 2017, when Apple sold 4.1m units although it also made $5.8bn in the year-ago quarter, suggesting that the average selling price of a Mac was higher in the just gone quarter.

How many Apple Watches did Apple sell in Q2 2018?

The Apple Watch was last updated in September 2017. We don’t know exactly how many watches Apple has sold, because it reports Watch sales as part of its Other Products section (which also includes Apple TVs, iPods, peripherals and accessories, and now the HomePod). 

Nor do we know exactly how many “other products” Apple sold, but we do know that it made $3.9bn from those sales, a 38% increase compared to Q2 of 2017, when it made $2.8bn in revenue for this category.

However, Apple did say that its wearable revenue increased by 50%. Wearables includes Apple Watch, AirPods and also Beats headphones.

How much money did Apple make from the App Store & iTunes?

The new HomePod may have sold Apple a few more Apple Music subscriptions. This quarter Apple Music passed 40 million subscribers.

During the previous quarter’s conference call, CFO Maestri suggested that there would be strong performance from services (and wearables) in the fiscal second quarter.

Apple’s services category includes the App Store, Apple Music, iCloud, and Apple Pay.

The company made $9.2bn in revenue from these ‘services’, which is 31% higher than the same quarter in 2017 (when it made $7bn), and 8% higher than the previous quarter, when it made $8.5.


Cook noted: “We also grew revenue in all of our geographic segments, with over 20% growth in Greater China and Japan.”

The revenue breakdown was as follows:

  • Americas $24.8bn
  • Europe $13.8bn
  • Greater China £13bn
  • Japan $5.5bn
  • Asia Pacific $3.9bn

There were concerns about China, but this was actually 21% higher than the year ago quarter. Speaking to analysts in the conference call that followed the results report, Apple CEO Tim Cook noted that the iPhone was the best-selling smartphone in China in the quarter, as well as pointing out that the iPhone is not Apple’s entire product strategy in China, citing good growth in Mac, Apple Watch, and Services revenue there.

How does this compare to Apple’s predictions?

When Apple announced its Q1 financial results on 1 February 2018, the company made the following predictions for Q2 2018:

  • Revenue between $60bn and $62bn
  • Gross margin between 38 percent and 38.5 percent
  • Operating expenses between $7.6bn and $7.7bn
  • Other income/expense of $300m
  • Tax rate of approximately 15 percent

We’ll find out how they compare later, and will update this article.

Apple’s capital returns

Share holders will be eagar to find out how much of its capital Apple will be returning to them as part of the usual dividend pay out.

Apple’s board has approved a new $100 billion share repurchase authorization and a 16 percent increase in our quarterly dividend.

The Board has declared a cash dividend of $0.73 per share of Apple’s common stock payable on 17 May 2018 to shareholders of record as of the close of business on 14 May 2018.

Q3 2018 predictions

Apple provided the following guidance for its fiscal 2018 third quarter.

  • Apple is providing the following guidance for its fiscal 2018 third quarter:
  • Revenue between $51.5 billion and $53.5 billion
  • Gross margin between 38 percent and 38.5 percent
  • Operating expenses between $7.7 billion and $7.8 billion
  • Other income/(expense) of $400 million
  • Tax rate of approximately 14.5 percent

Wall Street predicts that the company will see revenues of about $52bn for quarter that ends on 30 June, and that it will sell around 42m iPhones.

Listen to Apple’s earnings call

You can listen to Apple’s financial results conference call on Apple’s website; as well as the raw numbers, you’ll hear from Apple executives as they discuss the earnings report and give hints about what’s to come.

To listen, you’ll need an iPhone, iPad or iPod touch with Safari 5.1.10 or later on OS X v10.6.8 or later; Safari on iOS 6.0 or later; or QuickTime 7 on Windows.

Click here to listen to the call.

Read on to find out about previous quarters’ performance, and how many iPhones, iPads and Macs Apple sold in the past.

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