Apple ( $AAPL ) Earnings Breakdown

Apple ( $AAPL ) Earnings Breakdown

Highlights:

-Quarterly revenue: $90.8 billion, down 4% year over year.
-Quarterly earnings per diluted share: $1.53.
-Record revenue in Services segment, reaching an all-time high.
-Launch of Apple Vision Pro showcasing the potential of spatial computing.
-Anticipation for an exciting product announcement and Worldwide Developers Conference.
-Active installed base of devices achieves a new all-time high across all products and geographic segments.
-Board authorizes an additional $110 billion for share repurchases, reflecting confidence in Apple's future.
-Quarterly dividend raised for the twelfth consecutive year, demonstrating commitment to shareholder value.
-Strong customer satisfaction and loyalty contribute to a new EPS record for the March quarter.

Good Parts:

-All-time high revenue in Services segment indicates growth and diversification in revenue streams.
-Active installed base of devices reaches a new all-time high, indicating strong customer satisfaction and loyalty.
-New EPS record achieved for the March quarter.
-Board authorizes additional $110 billion for share repurchases and raises quarterly dividend for the twelfth consecutive year.

Bad Parts:

-Overall revenue down 4% year over year, which might indicate challenges in certain product segments or market conditions.
-Reduction in revenue from Products segment, particularly iPhone, Mac, and iPad categories.
-Operating expenses continue to rise, impacting operating income.
-Decline in net sales in some geographic segments, such as Greater China.
Increase in cash paid for income taxes compared to the previous year.

Income Statement Grade:

Good Parts:

-Record revenue in Services segment.
-New EPS record for the March quarter.

Bad Parts:

-Overall revenue down 4% year over year.
-Reduction in revenue from Products segment.

Grade: B-

Notes:

-Services segment showing resilience and growth potential.
-Product segment revenue decline needs attention and strategy adjustment.

Balance Sheet Grade:

Good Parts:

-Healthy cash and cash equivalents.
-Marketable securities position remains strong.

Bad Parts:

-Increase in current liabilities compared to the previous period.
-Accumulated other comprehensive loss.

Grade: B+

Notes:

-Strong liquidity position with ample cash and marketable securities.
-Increase in current liabilities may indicate short-term financial obligations.

Cash Flow Statement Grade:

Good Parts:

-Positive cash generated by operating activities.
-Strategic investments in marketable securities.

Bad Parts:

-Significant cash used in financing activities, particularly in repurchasing common stock.
-Increase in cash paid for income taxes.

Grade: B

Notes:

-Operating activities show strength in generating cash.
-Financing activities need scrutiny for effective capital allocation.

Summary:

Apple's second-quarter earnings report reflects a mixed performance with notable strengths in the Services segment and shareholder value management through increased dividends and share repurchases. However, challenges persist in certain product segments and geographical markets, demanding strategic adjustments to sustain growth and profitability. Overall, Apple maintains a strong financial position but must address areas of weakness to ensure sustained success.