How to measure Apple’s success without unit sales
November 8, 2018 by Steven M. PetersA veteran analyst suggests six new metrics.
From a note by Gene Munster to Loup Ventures’ subscribers that landed on my desktop Thursday:
I’m guilty of falling into the unit trap. It took me 5 days to realize the company grew revenue 20% y/y and earnings 40% y/y in the Sept. 2018 quarter, despite Apple highlighting those data points 3 times on the earnings call…
We believe this is how Apple would have reported the Sep-18 quarter under the new reporting approach:
- Grew revenue by 20% (highest rate in 3 years) and earnings by 41%. (We expect 11% revenue growth and 26% earnings growth in FY19).
- Grew installed base at “double digits,” which now likely exceeds 1.4B devices.
- Services grew at 17% despite a difficult y/y comp.
- Returned $23.2B to investors.
- Retail now has 506 locations, with 70k employees, up from 65k earlier in the year.
- Saw Wearables growth of over 50%, compared to 60% in Jun-18, and 50% in Mar-18…
In a separate list, Munster suggested six data points Apple ought to release each quarter going forward:
- Earnings growth
- Revenue growth
- Hardware gross margin
- Services gross margin
- Installed base
- Revenue per user
My take: This is Munster’s wish list, which it seems to me falls considerably short of the version of the Sep-18 quarter he had just offered in his bullet points. The whole thing is a mystery, and until the company posts the new schedule Luca Maestri promised last week, it will linger like a bad odor over the market. I’ve been keeping an eye on the Investor Relations website. No sign as of Thursday morning.
See also: Apple’s new translucency: Watch CNBC freak (video)
Sponsored: Find a Qualified Financial Advisor
Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.