Apple stock rose by more than 5 percent in after-hours trading Tuesday after it beat Wall Street’s expectations for earnings per share and revenue and also issued strong revenue guidance for its fourth fiscal quarter, suggesting strong sales growth year-over-year.
Kif Leswing of Business Insider had the news:
The strong guidance also hinted at the launch of a redesigned iPhone in September, which is expected to sell briskly.
Although CEO Tim Cook had warned that iPhone sales might see a “pause” ahead of the expected September launch of the new iPhone, iPhone unit sales were in line with Wall Street expectations and in line with last year’s performance.
Notably, Apple sold 14% more iPads than it did a year ago, breaking a 13-quarter streak of year-over-year declines. However, revenue was only up 2% on an annual basis, suggesting that many of these sales were of the less expensive $329 iPad Apple introduced during the quarter.
One trouble spot in the earnings was Apple’s performance in China, which was down 10% year-over-year.
Anita Balakrishnan of CNBC.com reported that Apple still had strong phone sells in advance of the Apple 8:
Despite expectations for a “lame duck” quarter ahead of the iPhone 8 launch, Apple sold 41 million iPhones during the quarter, surpassing 1.2 billion total iPhones sold.
The company also hit a major goal, as the App Store drove Apple’s Services division to a record high, the size of a Fortune 100 company.
“If you look at the products, we sold 41 million iPhones, but frankly it’s better than that because we also reduced channel inventories by 3.3 million,” CEO Tim Cook told CNBC’s Josh Lipton on Tuesday. “If you look across the world, we had several markets in Asia, in Latin America, and the Middle East which grew more than 25 percent year on year. If you look at [iPhone] 7 in the [iPhone] 7 Plus, we grew strong double-digit year on year compared to the 6S plus a year ago. So iPhone was terrific.”
Shares popped more than 5 percent after hours, reaching above $157. Apple’s record intraday high is $156.65, so if these levels hold tomorrow morning, Apple will open at a record high, with a market capitalization of over $830 billion.
Dan Frommer and Rani Molla of Recode reported that iPad sales grew for the first time in more than three years:
But more importantly, its forecast for the current September quarter — when the next, big iPhone launch is expected — is strong. Apple says to expect $49-$52 billion in fiscal fourth quarter revenue, more than many had anticipated.
This suggests Apple is confident in a big iPhone launch in September — not a delay to October, which is in its next fiscal year. Specifically, Above Avalon analyst Neil Cybart had estimated an October launch would have led Apple to guide fourth-quarter revenue much lower, such as a range of $43-45 billion.
Overall, Apple reported $45.4 billion in third-quarter revenue, representing 7 percent year-over-year growth. Of note, iPad sales grew for the first time in more than three years, reaching more than 11 million units.
Apple’s Services business, which includes iTunes and the App Store, continues to be a bright spot, and was its fastest growing by year-over-year change in revenue.
