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Apple Earnings: Revenue and Profits Soar

By Daniel Sparks - Nov 2, 2018 at 6:27AM

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But the tech giant's guidance suggests growth is about to slow.

After seven quarters in a row of accelerating revenue growth, Apple (AAPL 0.00%) managed to grow its business even faster in its fiscal fourth quarter. Revenue soared 20% year over year as the company benefited from surging iPhone revenue and big gains in the company's services and "other products" segments.

As investors digest the company's strong quarter, which was reported Thursday, here's a look at some key takeaways from the period, including why investors shouldn't expect Apple's streak of accelerating growth to continue in the first quarter of fiscal 2019.

Apple marketing chief Phil Schiller reveals the iPhone XR.

Apple marketing chief Phil Schiller reveals the iPhone XR. Image source: Apple.

Apple fourth-quarter earnings: The raw numbers


Q4 2018

Q4 2017

Year-Over-Year Change


$62.9 billion

$52.6 billion


Earnings per share




Gross profit margin




Data source: Apple fourth-quarter operating summary and financial statements.

Apple's results demonstrated monstrous momentum, with revenue rising 20% year over year to $62.9 billion. Not only was this an acceleration from the 17% revenue growth Apple posted in its fiscal third quarter, but it was the company's fifth quarter in a row of double-digit revenue growth.

Earnings-per-share growth of 41% year over year was also an acceleration from 40% growth for the key metric in fiscal Q3. This significant outsize growth in earnings per share compared with revenue growth during the period was driven by a combination of Apple's aggressive share repurchase program and gross margin expansion. Apple's gross profit margin expanded from 37.9% in the year-ago quarter to 38.3%.

Segment results

Product Segment

Q4 2018 Revenue

Q4 2017 Revenue

Year-Over-Year Change


$37.2 billion

$28.8 billion



$4.1 billion

$4.8 billion



$7.4 billion

$7.2 billion



$10 billion

$8.5 billion


Other products

$4.2 billion

$3.2 billion


Data source: Apple fourth-quarter operating summary.

The big highlight in Apple's segment operating data was a huge jump in iPhone revenue. Revenue for Apple's smartphone segment increased an impressive 29% year over year. What's particularly interesting is that this occurred on flat growth in iPhone unit sales. This year-over-year gain in iPhone revenue, therefore, was driven entirely by higher average selling prices for the key product. The iPhone's average selling price surged from $618 in the fourth quarter of fiscal 2017 to $793 in the fourth quarter of fiscal 2018.

A pie chart showing Apple's fourth-quarter revenue by product segment.

Data source: Apple fourth-quarter operating summary. Chart by author.

Other standout segments from the period were services and "other products." Revenue from the two segments increased 17% and 31% year over year, respectively. This extended the two segments' recent strong momentum as the services business benefits from fast-rising App Store sales and the other products segment is aided by surging growth in wearables products.

Looking ahead

A glance at Apple's revenue guidance implies the company's streak of accelerating growth is about to come to an abrupt end. The tech giant guided for fiscal first-quarter revenue between $89 billion and $93 billion, representing year-over-year growth of about 1% to 5%.

Despite the expected slowdown in the important holiday quarter, Apple CEO Tim Cook is confident in the company's product lineup, which has seen lots of refreshes in two recent Apple events. "Over the past two months, we've delivered huge advancements for our customers through new versions of iPhone, Apple Watch, iPad and Mac as well as our four operating systems," Cook said in the company's fourth-quarter earnings release, "and we enter the holiday season with our strongest lineup of products and services ever."

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