Also significant is a continued growth in the company's non-hardware revenue: Apple generated $9.55 billion with services during its fiscal Q3, compared to $7.23 billion a year ago. Unit sales of 41.3 million fall pretty in line with Wall Street expectations (the consensus was around 41.6), but while units are up year-on-year only 1 percent, revenue over the same period is up 20 percent.
"[The] iPhone X was the most popular iPhone in the quarter once again, with a customer satisfaction score of 98% according to 451 Research", Apple CEO Tim Cook said during the earnings call. All Cook would say is that Apple "couldn't be more excited by the products and services in our pipeline". Apple is forecasting a revenue guidance of between $60 and $62 billion in the fourth quarter, which is slightly above analyst estimates of $59.57 billion in the next quarter.
The company earned $2.34 per share on revenue of $53.3 billion for its fiscal third quarter, compared with EPS of $1.67 and revenue of $45.4 billion.
Apple shrugged off lower-than-expected sales for the iPhone on Tuesday as shares rose sharply after market close, when investors got a glimpse of a far more important number: how the company projects sales to be next quarter. When asked about this on the earnings call, Cook called smartphones the world's best business to be in simply because of its size. ut he didn't provide a strong answer for concerns that the market has become saturated in developed countries or that users are upgrading their devices less frequently.
Analysts had predicted that the average iPhone price would be $693. It rose 31 percent compared to the same quarter previous year, putting it at $9.54 billion. Profit came in at US$2.34 per share.
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Apple shares rose about 3.5 per cent in extended trading on Tuesday. Supply chain leaks suggest the company is preparing to launch a bigger-screen version of the iPhone X as well as a cheaper model. In a note ahead of earnings, Andy Hargreaves of KeyBanc Capital Markets said that the "the risk of a direct impact from trade conflicts or increased nationalism among foreign consumers that damages worldwide iPhone demand" might offset potential gains for Apple. The company said it expects gross margins of 38 per cent to 38.5 per cent in the fourth quarter, compared with analyst expectations of 38.3 per cent, according to Thomson Reuters I/B/E/S.
Revenue rose 17 per cent to Dollars 53.27 billion, also exceeding Street forecasts for USD 52.37 billion. Of course, the iPhone still pulled down almost $30 billion in total revenue, but Services has rapidly grown from a minor segment of Apple's business to a major component. The category includes the App Store, Apple Music, iCloud storage and Apple Pay.
The Other Products division, home to the Apple Watch, AirPods, and the HomePod, took in $3.7 billion in revenue, up a whopping 37% year-on-year.
Another category potentially affected by tariffs is the Apple Watch, which is one of Apple's growth drivers.