Apple’s Q4 2017 Earnings: The iPhone X Should Fix Things

Apple has posted its Q4 earnings for FY 2017 and is reporting revenue of $52.6 billion with $10.7 billion in profit. This was earned by selling 46.7 million iPhones, 10.3 million iPads, and 5.4 million Macs.

For this quarter, it’s important to focus on the iPhone demographic. Apple’s iPhone 8 and 8 Plus have been nothing short of the rage as of late on TV and carriers, but it’s the iPhone X people have really been waiting for. Therefore, not many people bought the new iPhones, which resulted in a mere 2 percent increase in sales over Q4 2016. CEO Tim Cook believes during Q1 2018, the company will see stronger iPhone sales what with the iPhone X launching this Friday and many customers eager to get their hands on it this holiday season.

Additionally, Cook says Apple’s seen its most profitable quarter for its services department, resulting in more than a 30 percent increase year over year. The company believes this industry is the key to long-term growth, and it looks like they’re probably right.

“We’re happy to report a very strong finish to a great fiscal 2017, with record fourth quarter revenue, year-over-year growth for all our product categories, and our best quarter ever for Services,” said Tim Cook, Apple’s CEO. “With fantastic new products including iPhone 8 and iPhone 8 Plus, Apple Watch Series 3, and Apple TV 4K joining our product lineup, we’re looking forward to a great holiday season, and with the launch of iPhone X getting underway right now, we couldn’t be more excited as we begin to deliver our vision for the future with this stunning device.”

Finally, Apple has provided the following guidance for Q1 2018:

  • revenue between $84 billion and $87 billion
  • gross margin between 38 percent and 38.5 percent
  • operating expenses between $7.65 billion and $7.75 billion
  • other income/(expense) of $600 million
  • tax rate of 25.5 percent