AAPL

4 Must-See Takeaways From Apple, Inc.'s Earnings Call

An Apple customer holds his new iPhone X at an Apple Store

Apple (NASDAQ: AAPL) earned a straight A from investors when it reported better-than-expected fourth-quarter results last week. Accelerating revenue growth and massive guidance highlighted strong performance and big growth potential.

But there was more to the quarter than the key metrics. During Apple's fourth-quarterearnings call management discussed demand for its just-launched iPhone X, the drivers behind Mac sales, its wearables business, and more. Here's a look at the most insightful takeaways from theearnings call

1. iPhone X demand is strong

When asked about the specific mix of iPhone orders Apple is receiving by model, Apple CEO Tim Cook wouldn't cave. "[W]e never go through mix," he told the analyst. But Cook did comment on the overall solid demand for Apple's newest iPhone, the iPhone X:

2. Mac sales are benefiting from these drivers

When measured by revenue, Mac was Apple's third-largest segment in the quarter, behind iPhone and services. Notably, fiscal 2017 proved to be the best year ever for Mac. In addition, Mac sales were up an impressive 25% year over year in Q4.

But what, exactly, were the main drivers behind Apple's impressive growth in Mac sales? Apple CFO Luca Maestri explained:

3. Apple Watch sales are soaring

Apple doesn't break out Apple Watch sales in its operating data. Instead, it lumps them in with the company's other products revenue, which was up 36% year over year -- making other products Apple's fastest-growing segment. Based on the segment's rapid growth, investors would assume Apple Watch is doing well.

Fortunately, however, investors don't have to play a guessing game. During Apple'searnings call Cook said Apple Watch sales have been rising sharply:

Cook was pleased with the Watch's success enough to conclude that adding cellular connectivity with the Apple Watch 3 Series has been a "game changer."

4. Wearables may be Apple's next fast-growing product segment

If Apple does eventually begin breaking out Apple Watch sales into a more specific product segment, it will likely call it wearables. And Apple will likely opt to include sales of AirPods, and any other future wearable technology it sells, alongside Apple Watch. After all, Cook is already providing data on wearables as a category -- and the segment is looking good:

Apple'searnings callprovided further support for a bullish investment thesis for the tech giant. With strong demand for its latest iPhone, healthy Mac sales, and promising growth in newer product segments, there's plenty of reasons for Apple's growth to remain strong in the years ahead.

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Daniel Sparks owns shares of Apple. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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