Apple Forecast Tops Analysts' Estimates on New IPhones, Services

Apple iPhone X

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. Mac sales were down 13 percent and iPad sales rose, but only just; 11.55 million units were sold compared to 11.42 million units a year ago.

Despite the beat, James Cordwell, an analyst from Atlantic Equities, said the high selling prices might cause investors some concern because "there's a limit to how much Apple can grow the iPhone franchise by pushing pricing". The company expects to see iPhone sales from July through September rise by 14% to 18% which would indicate sales between $60 billion and $62 billion for its most important product.

Apple Inc. on Tuesday posted quarterly results that topped Wall Street targets and forecast revenue in the current quarter above expectations, driven by sales of higher-priced iPhones and revenue from services like the App Store, Apple Music and iCloud.

Apple reported record services revenue of US$9.55 billion, up 31 per cent from a year earlier. Its mobile unit reported a 22 percent drop in sales revenue to $20.2 billion from the same time previous year.

Apple is well on its way to crossing a historic milestone and becoming the first company ever with a $1 trillion dollar valuation. The forecast is a measure of how well Apple thinks it can fare in a market where consumer interest in having the latest and greatest continues to wane.

The tech company posted $53.3 billion in third-quarter revenue, up 17 percent from the same quarter past year.

Shares rose almost 3 percent in after-hours trading, from a $190.29 per share close - edging the company closer to its pursuit of a $1 trillion market value.

But several of Apple's services do not face strong rivals. The revenue included $236 million from resolving lawsuits such as Apple's long-running dispute with Samsung Electronics Co Ltd.

Meanwhile, the Other Products category (for AirPods, HomePods and their ilk), has jumped 37 percent since this time a year ago. Profit came in at US$2.34 per share.

Gross margin for the quarter was 38.3 percent compared to 38.5 percent in the year-ago quarter, with global sales accounting for 60 percent of revenue.

Cook said that Apple products have not so far been directly affected, and that the company is evaluating the latest Trump move now in a public comment phase.

Finally, while Cook expressed opposition to new trade tariffs between the U.S. and China, noting how they're anti-consumer, he said that Apple is continuing to see double digit growth in China along with other major markets.

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