Profit in the final quarter of last year was $20bn – a dip of less than 1% – on revenue of $84.3bn, even as money from iPhone sales was down 15% from the same period in 2017.
The full extent of the slump in iPhone sales was not clear because Apple for the first time stopped reporting unit sales for its iconic smartphones.
Overall revenue for Apple dipped nearly 5% from a year ago, in line with the lowered guidance earlier this month that stunned the market and hammered shares of the iPhone maker.
“While it was disappointing to miss our revenue guidance, we manage Apple for the long term, and this quarter’s results demonstrate that the underlying strength of our business runs deep and wide,” chief executive Tim Cook said in the earnings release.
The update for Apple’s first fiscal quarter to December 29 was greeted with relief on Wall Street, as shares rallied 5.75% in after-hours trade.
Apple had been under pressure to show it can weather the slump in the global smartphone market and diversify its revenue base, and the latest results appeared to satisfy the market.
Services revenue reached an all-time high of $10.9bn, up 19% over the prior year. Apple also boosted sales of wearables and accessories by 33% from last year.
Cook has long emphasised the potential of that side of Apple’s business.
“Our active installed base of devices reached an all-time high of 1.4bn in the first quarter, growing in each of our geographic segments,” Cook said.
“It’s driving our Services business to new records thanks to our large and fast-growing ecosystem.”
An Apple streaming music service launched in mid-2015 now boasts more than 50mn subscribers.
And the California-based company looks to build momentum for its Apple TV service, with deals to have it installed on television models coming out this year.
During the earnings call, Cook confirmed that Apple plans to produce its own shows in a move that could challenge streaming television giants Netflix and Amazon Prime, which have invested heavily in original content.
Apple took a hit in the “Greater China” region, where revenue plunged almost 27%, which had been expected following the company’s latest revenue warning.
McDonald’s
Fast-food giant McDonald’s said yesterday its profits increased in the fourth quarter partly as a result of higher sales in the US and other key markets.
But the dramatic increase, more than doubling profits to $1.4bn, was due mainly to large one-time costs associated with US tax reform in the year-ago period.
And total revenues declined 3.3% to $5.2bn, the result of company selling restaurants to franchisers.
Comparable sales rose 2.3% in the US following a shift to more expensive menu items and price increases. Revenues from the US accounted for about 37% of the global total.
International markets with especially strong sales included Britain, Germany, Australia, Italy, the Netherlands and Japan, the company said.
McDonald’s has ramped up investment in digital operations, including smartphone applications and home-delivery in some markets. The company’s 2018 capital spending was $2.7bn, up from $1.9bn the prior year.
In 2019, McDonald’s forecast capital spending of $2.3bn.
“As we begin 2019, we have confidence in our plan and the continued growth opportunities from delivery, Experience of the Future and digital,” said chief executive Steve Easterbrook in a press release.
“We remain committed to running great restaurants, which will continue to make a difference for our customers and drive long-term sustainable growth.”
Santander
Santander’s net profit rose by 4% in the fourth quarter as a strong performance by the bank in Brazil and higher net interest income offset a Spanish slump.
“Latin America remains an important motor of growth for the group, with good progress, especially in Brazil and Mexico,” chairman Ana Patricia Botin said in a statement yesterday.
The eurozone’s biggest bank by market value said net profit rose to €2.07bn ($2.37bn) in the October-December period.
“Core revenue trends look positive but partially offset by higher costs and while capital rose it was a touch below our estimate,” Jefferies said in a research note, adding that quarterly net profit was 8% above consensus.
Santander came under scrutiny this month when it said Italian banker Andrea Orcel would no longer take over as its chief executive as it could not meet his pay expectations.
Net profit in the fourth quarter rose by 1.4% to €663mn in Brazil, which is Santander’s largest market, while net profit for the whole of 2018 jumped 22.3%.
Royal Caribbean
Royal Caribbean Cruises Ltd forecast current-quarter earnings above Wall Street estimates yesterday, benefiting from higher demand for its Caribbean cruises and passengers spending more money on activities while on board.
The company’s shares rose about 5% in trading before the bell.
Royal Caribbean has been adding ships to its fleet, including the world’s largest cruise liner, Symphony of the Seas, to meet rising demand.
The company said it expects adjusted first-quarter earnings of $1.10 per share, above analysts’ estimates of $1.06, according to IBES data from Refinitiv.
Total revenue rose 16.4% to $2.33bn, edging past analysts’ average estimate of $2.31bn
Net income attributable to the company rose to $315.7mn, or $1.50 per share, in the fourth quarter ended December 31, from $288mn, or $1.34 per share, a year earlier.
Novartis
Novartis’s 2019 sales and profit growth guidance disappointed investors seeking more from chief executive Vas Narasimhan’s efforts to focus the Swiss drugmaker on high-tech medicines while shedding non-core assets.
The company sees net sales growing by a low- to mid-single-digit percentage, with core operating income up by a mid-single-digit rate, Novartis said yesterday.
Narasimhan, who took over last February, has unloaded an over-the-counter drugs joint venture to GlaxoSmithKline, is selling Novartis’ US generics pills business, and aims to spin off the Alcon eyecare unit to shareholders.
Simultaneously, he is loading up on gene and cell therapies and radioactive cancer drugs via acquisitions as he turns Novartis from a healthcare conglomerate into a more-focused prescription drugs company.
Fourth-quarter core operating profit rose to $3.39bn, shy of the average $3.44bn in a Reuters poll of analysts.
Sales rose to $13.3bn, matching the poll. Full-year sales rose 5% to $51.9bn, delivering on Novartis’s 2018 goal of mid-single-digit percentage growth.
Alibaba
Chinese e-commerce leader Alibaba said yesterday that net profit increased 37% in the latest quarter as growth in cloud computing and other business lines helped offset a slowing expansion in core online retail.
Net profit reached 33.0bn yuan ($4.9bn) in the October-December third quarter.
Alibaba dominates China’s emerging consumer culture and its corporate results were widely anticipated for any signs that a worsening Chinese economic slowdown and the US-China trade tussle were turning off shoppers.
Revenue growth, the key measure of the company’s business health, indeed slowed in the quarter. Overall company revenues reached 41% while turnover in core e-commerce was 40%.
Most companies would envy such a performance, but that was the slowest increase in more than two years for a company accustomed to increases of 50 or even 60%.
A consensus of analysts polled by Bloomberg had forecast a revenue rise of nearly 44%.
Chinese GDP grew 6.6% in 2018, the slowest rate in 28 years, according to official figures that sparked concern globally about the world’s second-largest economy.
Alibaba’s earnings announcement made no mention of the country’s economic slowdown, as CEO Daniel Zhang focused on the growing contribution of forward-looking segments like cloud computing and data.
General Dynamics
US aerospace and defence company General Dynamics Corp beat analysts’ estimates for quarterly profit yesterday, boosted by strong demand for the IT services it provides to the US Department of Defense.
Shares of the Falls Church, Virginia-based company rose 3.2% to $181.60 before the bell.
Revenue at the company’s IT unit jumped 93.3% to $2.38bn in the fourth-quarter ended December 31. General Dynamics bought IT services-heavy CSRA Inc for $9.7bn last year.
US weapons makers are expected to gain from higher defence spending and demand for fighter jets, tanks and other systems, as President Trump’s administration seeks to make the country an even bigger arms merchant to the world.
In December, Trump backed plans to request $750bn from Congress for defence spending in 2019, signalling a rise in Pentagon spending at a time of potential belt-tightening elsewhere in the government.
Total new Gulfstream jet deliveries, another important metric for the company, rose to 42 units from 30 in the same quarter a year ago.
Net earnings for the company, which makes a wide range of weapons and communications systems for the US military, rose to $909mn, or $3.07 per share, from $636mn, or $2.10 per share, a year earlier.
Total revenue rose 25.4% to $10.38bn, beating estimates of $10.36bn.
Bosch
German auto supplier Robert Bosch announced a push into parking, recharging and maintenance services for electric and self-driving vehicles as it posted flat annual operating profit yesterday.
Bosch said it was in talks to expand a research alliance on autonomous vehicles and planned to invest €4bn ($4.6bn) to develop self-driving cars by 2022.
Earnings before interest and tax (EBIT) reached €5.3bn, the unlisted company said. In 2019, Bosch hopes to continue to secure its high level of earnings, the company said.
Sales of driver assistance systems would generate €2bn in sales this year, Bosch said, adding that it had let go of 600 staff working on diesel engines after a slump in demand.
Bosch said the market potential for on-demand ride-hailing using self-driving robotaxis was huge, citing Roland Berger analyst estimates for a market worth $160bn by 2035.
Naturgy Energy
Spain’s Naturgy Energy Group reported higher annual core profit and sales on Wednesday but a heavy annual net loss after a €4.9bn ($5.6bn) writedown on assets including coal and nuclear plants last June.
Earnings before interest, taxation, depreciation and amortisation (EBITDA) rose to €4.02bn from €3.90bn helped by an improved performance in its gas and power businesses.
Sales rose to €24.34bn from €23.21bn.
On a net basis, the company, formerly called Gas Natural, posted a loss of €2.8bn after a profit of 1.4bn a year earlier.
Siemens
Net income halved at Siemens for the latest quarter, but the German industrial giant said the reduction could be explained by profits last year from the sale of shares and one-time benefits from US tax law.
Profits for the first quarter of 2019 – which ran from October to December 2018 – stood at €1.1bn ($1.3bn), a decline from €2.2bn in the same period one year earlier.
But the company said the new figures left it on track and where it wanted to be, arguing that the 2018 figures had been inflated by the sale of Osram shares and a €437mn boost from revaluing tax positions after a US tax reform last year.
“Excluding those factors, [fiscal year 2019 first quarter] income from continuing operations and net income are on their respective prior-year levels.”
Overall revenue saw a slight uptick, to €20.1bn, a 1% increase from the €19.8bn it saw in the same three months in 2018.
Siemens boss Joe Kaeser indicated the figures showed there was still work to do.
“Our continued high order growth underlines the customer confidence in the performance of our company. There is still much to do before we achieve industry-leading margins in all our businesses,” he said.
Canon
Japan’s Canon Inc expects its annual operating profit to drop for the first time in three years, as a Chinese economic slowdown and a stronger yen hit sales of cameras and panel-making equipment.
The camera and printer manufacturer yesterday forecast an operating profit of ¥325bn ($2.97bn) for 2019, down 5.2% from ¥342.95bn a year earlier – the first decline since 2016. That would be below a consensus of ¥332.35bn of 18 analysts, according to Refinitiv data.
“We are bracing for a number of risk factors this year, including Sino-US trade frictions, an economic slowdown in China and emerging markets, as well as Brexit-driven political turmoil in Europe,” chief financial office Toshizo Tanaka said.
After enjoying some robust years, Canon is now battling a slowdown in orders for its equipment producing organic light emitting diode (OLED) screens.
Telenor
Norwegian telecom firm Telenor posted lower-than-expected fourth-quarter results yesterday and said earnings would grow more slowly in 2019 than last year.
Telenor, Norway’s second-largest company, with 173mn customers in eight countries across Europe and Asia, raised its full-year dividend by about 4%, lagging analysts’ forecasts for a 36% increase.
Telenor plans to buy back up to 3% of its shares however, helped by the introduction of a new goal to increase its debt from current levels, the company said.
Activist investor Constructive Capital recently asked Telenor to trim its balance sheet and pay higher dividends to owners, and analysts have also called for increased payouts.
The company will pay 8.40 Norwegian crowns ($0.9903) per share for 2018, up from 8.10 crowns in 2017 but lagging the average 11.0 crowns payment predicted in a Reuters poll of analysts.
Quarterly profit before interest, tax, depreciation, amortisation and other items (adjusted EBITDA) fell 4.3% year-on-year to 10.3bn Norwegian crowns, while analysts in the poll had expected a profit of 10.85bn crowns.
AMD
Chipmaker Advanced Micro Devices Inc on Tuesday reported record quarterly growth in data centre sales and projected revenue growth in fiscal 2019 above Wall Street expectations, sending its shares up 10% after the bell.
Investors were bracing for weak results from AMD after warnings from a host of other chipmakers about a slowdown in China that was triggered by a trade dispute with the US.
Shares of Nvidia Corp and Micron Technology Inc also rose nearly 2% in after-hours trading while Intel Corp was up marginally.
Bigger rivals Nvidia and Intel both flagged stagnating growth in data centre sales, a segment in which AMD is beginning to get a foothold on the back of its server chips.
AMD said it expects revenue in 2019 to grow at a high-single-digit percentage, while analysts were targeting growth of about 6%.
AMD’s fourth-quarter gross margin rose to 38% from 34% a year earlier. The company said it expects adjusted gross margins to be more than 41% for 2019, its highest level in nearly eight years. AMD’s quarterly revenue of $1.42bn also missed expectations of $1.45bn. Excluding items, AMD earned a profit of 8 cents per share, in line with the analysts’ estimates.
Amgen
Amgen Inc on Tuesday reported fourth-quarter profit that easily surpassed expectations as sales rose and tax expense fell, but competition for its older medicines is growing and the drugmaker forecast 2019 earnings below Wall Street estimates.
For the full-year, Amgen projected adjusted earnings of $13.10 to $14.30 per share on revenue of $21.8bn to $22.9bn. Wall Street analysts, on average, had forecast $14.61 per share on revenue of $22.9bn, according to IBES data from Refinitiv.
Speaking on a conference call, chief financial officer David Meline said Amgen faces headwinds in the form of competition for legacy products such as kidney drug Sensipar and rheumatoid arthritis treatment Enbrel as well as heightened US focus on the issue of prescription drug affordability.
He said Amgen’s 2019 outlook assumes its global net sales prices will drop by a rate in the “mid-single digits” after falling 1% in 2018.
Excluding items, Thousand Oaks, California-based Amgen posted adjusted quarterly earnings of $3.42 per share, topping analysts’ average expectations by 15 cents.
Revenue for the quarter rose 7% to $6.23bn, beating the average analyst estimate of $5.84bn.
EBay
EBay Inc will begin paying a dividend, it announced on Tuesday, while also reporting better-than-expected sales and profit for the fourth quarter as it benefits from a rise in online shopping.
EBay’s results for the final quarter of 2018 showed sales had risen 6.3% year-over-year to $2.88bn, exceeding Wall Street’s average estimate of $2.66bn, according to IBES data from Refinitiv.
The results and dividend come as eBay faces increased calls from two high-profile shareholders – Elliott Management and Starboard Value – to sell some divisions and restructure others.
EBay said quarterly net income from continuing operations reached $763mn or 80 cents per share, compared with a loss of $2.6bn or $2.51 per share, a year earlier, when it recorded a one-time tax-related expense of more than $3bn.
Excluding one-time items, the company earned 71 cents per share.
Biogen
Biogen Inc beat analysts’ estimates for fourth-quarter profit and revenue on Tuesday, buoyed by higher sales of its top-selling multiple sclerosis drugs, and forecast full-year profit ahead of Wall Street expectations.
Multiple sclerosis drug Tecfidera is facing competition from newer treatments such as Roche Holding AG’s Ocrevus, and Biogen has been banking on its spinal muscular atrophy treatment, Spinraza, to drive future growth.
In the fourth quarter ended December 31, sales from the company’s multiple sclerosis franchise, which also includes Tysabri, came in at $2.17bn, beating consensus estimates of $2.14bn, according to William Blair.
Biogen said it expects 2019 adjusted earnings in the range of $28to $29per share. Analysts on average were expecting $27.94.
Excluding items, the company earned $6.99 per share.
Boeing
Boeing Co shares jumped yesterday as the world’s largest planemaker raised its profit and cash flow expectations for 2019 amid a boom in air travel, while indicating it had overcome supplier delays that snarled production last year.
Chicago-based Boeing said it expects to deliver between 895 and 905 commercial aircraft in 2019, up from 806 aircraft it delivered last year, which kept it ahead of rival Airbus SE for the seventh straight year.
Investors closely watch the number of planes Boeing turns over to airlines and leasing firms in a year for hints on the company’s cash flow and revenue.
Boeing raised its full-year core earnings per share forecast to $19.90-$20.10 from $14.90-$15.10, and revenue to a range of $109.5bn to $111.5bn, from $98bn to $100bn, fuelled by strong volume across its commercial, military and services businesses.
Boeing chief executive Dennis Muilenburg said the company’s performance provides a “firm platform” to further invest in new innovation as the aviation industry is awaiting a 2019 decision on whether Boeing will move ahead with a new mid-sized aircraft dubbed NMA.
It also said the first all-new 777X widebody flight test airplane completed final body join and power-on, and the program remains on track for flight testing this year and first delivery in 2020.
The company forecast operating cash flow between $17bn and $17.5bn in 2019, compared with cash flow of $15.32bn in 2018, and above analysts’ average estimate of $16.73bn, according to IBES data from Refinitiv.
It expected 2019 core earnings between $19.90 per share and $20.10 per share, and revenue between $109.5bn and $111.5bn.
Boeing’s core earnings rose to $5.48 per share in the fourth quarter, from $5.07 per share a year earlier, and came in above Wall Street’s estimate of $4.57 per share.
Quarterly revenue rose 14.4% to $28.34bn, above analysts’ average expectation of $26.87bn. Boeing’s 2018 revenue surpassed $100bn for the first time in its 102-year history.