Thread by @neilcybart

Apple just released 4Q19 earnings:

$64.0 billion of revenue
$3.03 earnings per share (EPS)

My estimates were:

$64.4 billion of revenue
$3.00 EPS

Apple's 1Q20 revenue guidance:

$85.8B to $89.5B

My expectation: $88B to $91B
Consensus: $87B

Guidance is a tad light versus my expectation but slightly better than consensus.

iPhone revenue: $33.4B (my estimate: $34.3B)
Services revenue: $12.5B (my estimate: $12.2B)
Mac revenue: $7.0B (my estimate: $7.7B)
Wearables / Home revenue: $6.5B (my estimate: $5.9B)
iPad revenue: $4.7B (my estimate: $4.4B)

Apple repurchased nearly $18 billion of shares in 4Q19. That's a big number. Brings the total amount spent on buyback in FY2019 to $67 billion.

Greater China revenue was -2% year-over-year in 4Q19. That's a slight improvement from the -4% year-over-year result in 3Q19.

Apple reported a very big number for Wearables, Home, and Accessories. I will need to do more work on this, but at a glance Apple may have sold more than 10 million pairs of AirPods in a single quarter for the first time.

Apple's Wearables / Home / Accessories category grew more year-over-year in absolute dollars than Apple Services.

Wearables represent Apple's growth engine.

Apple earnings call has started.

iPhone 11 is currently the best-selling iPhone model (no surprise there)

Apple reported an all-time quarterly revenue record for Apple Pay. There were 3B transactions in 4Q19, exceeding PayPal and growing 4x as fast.

Apple Card is gaining a new "feature" later this year. You will be able to pay for iPhone on an installment plan.

iPad revenue was up 17%. Based on my model, Apple has reported four consecutive quarters of iPad unit sales growth.

iPad is back, that's for sure.

Apple crossed $100B of U.S. revenue in a single year for the first time in FY2019.

Tim Cook: We believe that we lead in innovation because we lead in our values.

Apple CFO Luca Maestri on iPhone:

Active installed base of iPhone grew to all-time highs in each geographical segment.

A big hole in the "iPhone users are switching to Huawei in China" narrative.

The number of transacting and paid accounts on Apple's digital platforms was up double-digits percent in all geographical segments. There are now 450M paid subscriptions across Apple's platform.

Apple saw an all-time quarterly revenue record for Mac in the U.S.

Apple Watch, AirPods, Beats, and Accessories were listed as driving growth in the Wearables / Home / Accessories segment. Implication is that home products did not contribute much to overall year-over-year growth for the category.

Apple has $260B of cash on the balance sheet.

Net cash (excludes the debt) stands at $98B.

Nancy Paxton, Apple's head of investor relations is retiring. She has done 93 earnings call.

Analyst Q: What will get iPhone back to growth?

Tim Cook: It's early but iPhone 11 / 11 Pro trends look good. We are bullish.

Said another way, iPhone may return to revenue growth on a year-over-year basis next quarter.

When iPhone returns to revenue growth, I wonder what will happen with the silly "Apple is betting on Services because iPhone revenue is falling" narrative.

Tim Cook: There will be a day in the future when we look back and see that Apple's greatest contribution will be to people's health.

Tim Cook: We are giving away a year of Apple TV+ for free with qualifying HW purchases to get those subscribers early on. It's a bold move.

Cook's comments sure seemed to suggest it's a limited time promotion. Some were wondering if Apple would keep the promotion going.

Tim Cook to analyst: We aren't giving precise numbers for our wearables business, nice try though.

Three out of four Apple Watch buyers are new to Apple Watch (same as last quarter).

Tim Cook: We are proud to have another product out there for people who want noise cancelling (referring to AirPods Pro).

A subtle hint that AirPods Pro represent an expansion to the AirPods line and not the *new* AirPods.

Tim Cook on China: A lot of moving parts but things continue to move in the right direction.

Tim Cook on "bundling": We are doing the Apple TV+ promotion with HW because we think people will like it. You don't see us doing that for other services though. With that said, I don't want to say you won't see other opportunities in the future.

Tim Cook on tariffs: My view is pretty positive as to where things are going. The tone around tariffs has changed significantly. We have included that reality in our 1Q20 guidance.

Tim Cook: We really don't know Apple Watch upgrade patterns yet since the product category is too young.

When it comes to AirPods Pro, we are thinking the early buyers will be current AirPods owners looking for a second pair.

My reaction: Yes to both.

Apple's earnings call is over.

A transcript of these tweets will be available as long as Twitter exists.

There are a lot of 4Q19 (& 1Q20) numbers to go over in greater detail. I will send out the first half of my Apple earnings review tomorrow (Thursday) in the morning to Above Avalon members (@AboveAvalonPlus)

To receive in your inbox, you can sign up here: aboveavalon.com/membership

@AboveAvalonPlus The first half of my Apple 4Q19 earnings review was sent out to Above Avalon members (@AboveAvalonPlus) earlier today. I went over the major takeaways. aboveavalon.com/dailypremiumup… ($)