Apple posted its third quarter earnings with a revenue of $53.3 billion, surpassing its projection by $1 billion. It’s the strongest third quarter for the company ever, despite one that tends to slow on iPhone sales as consumers prepare for new smartphone announcements in the fall. The average selling price of the iPhone was $724, which was above analyst estimates of $693.
Apple’s expected revenue for fiscal Q4 is $60 to $62 billion, a 16 to 19 percent growth from this period last year. The strong forecast could suggest that multiple new hardware devices are coming in the fall; so far, rumors suggest that up to three new iPhone models could be announced, while consumers are also anticipating a new version of the iPad Pro and a redesigned Apple Watch. Last quarter, Apple CEO Tim Cook did not confirm a midrange iPhone X device, but he did comment that the company will “continue to provide different iPhones … for folks to meet their needs.”
Stock prices are soaring, putting Apple closer to a trillion-dollar market value
Even without three new iPhones, however, the 2018 MacBook Pro with a third-generation keyboard was just released that will be part of next quarter’s revenue. Another thing to consider is that Apple also announced three iPhone models last year, but only the iPhone 8 and 8 Plus were accounted for in Q4 revenues since the iPhone X came out in November. (Apple’s fiscal Q4 ends on September 30th.)
Meanwhile, Mac sales have declined in sequential quarters after Apple all but confirmed that MacBooks with first and second-generation butterfly keyboards have a faulty design. Last month, it launched a repair program that extended its keyboard service program to cover up to four years since the original purchase date, though it will not be using third-generation components for this repair.
The biggest revenue jump continues to be within the services department (which includes Apple Music, iCloud, and Apple Care) with a 31 percent increase to a record $9.55 billion in revenue. After today’s announcements, Apple currently has a market cap of $935 billion. If stock continues to rise above 7 percent, Apple could become the first trillion-dollar company at a price of $203.46 per share.
Apple’s earnings for the most recent quarter reveal that the company is doing better than ever. Not only did it meet expectations, but it exceeded them too — and things are only likely to get better for Apple as it heads into another iPhone refresh cycle.
Generally speaking, the quarter ending June 30 is the slowest for Apple, at least when it comes to sales of the iPhone and Apple Watch. It’s right at the end of an iPhone’s lifetime — and right before a new set of iPhones take over. This year, however, Apple posted its strongest ever third-quarter earnings, beating expectations.
Apple also said during its earnings call that it expected revenue next quarter to be between $60 billion and $62 billion, which is again ahead of expectations from Wall Street — which come in at $59.47 billion. Meeting that estimate would put represent a hefty 15 percent increase over the same quarter last year.
In terms of units, Apple sold about as many iPhones as it did during the same quarter last year — 41.3 million. The difference this quarter, however, is that the average selling price of those iPhones was quite a bit higher, thanks to the more expensive iPhone X, which starts at $1,ooo.
Apple is also doing excellent in the wearables market. During the call, the company boasted about 60 percent growth in wearables, a segment that includes the Apple Watch, AirPods, and Beats headphones. It’s likely that segment will continue to grow — the Apple Watch is growing in popularity and AirPods have become a hit, too.
Apple is also growing its “services” category, which includes things like Apple Music, Apple Pay, Apple Care, iCloud, iTunes, and so on. Apple posted a hefty $9.55 billion in revenue for this category, which is up a hefty 28 percent from the same quarter a year ago. That segment also beat out Wall Street estimates, which came in at $9.21 billion. According to Apple, the boosted revenue is due to high Apple Pay usage, and an increase in paid subscribers through the App Store.
“Apple Pay continues to expand with well over 1 billion transactions last quarter, triple the amount from just a year ago, with growth accelerating from the March quarter,” said Apple CEO Tim Cook during the earnings call.