Apple Earnings: Shares Gain 3% in After Hours

Marcus Newton
August 1, 2018

Apple (AAPL) reported its Q3 2018 earnings Tuesday, posting earnings of $53.3 billion revenue on $2.34 earnings per share. Its mobile unit reported a 22 percent drop in sales revenue to $20.2 billion from the same time a year ago.

Cook dismissed the need for record revenue during the call, saying that because the smartphone market is so vast, it doesn't matter if revenue dips or goes up 10%.

Billions of dollars that Apple has been spending to buy back shares could help propel the company past the one-trillion-dollar mark for market value. Apple pushed to $196.00 per share, which is 4 cents above its all-time intraday high.

Analysts were eager for news from the California-based company about how the company is riding out trade turbulence between the U.S. and China.

The results "were driven by continued strong sales of iPhone, Services and Wearables, and we are very excited about the products and services in our pipeline", Tim Cook, Apple's chief executive officer, said in a statement. In September, Apple expects to unveil three new models, which explains the strong forecast.

The company sold 41.3 million iPhones in its third quarter, generating revenue of US$29.9 billion.

Apple (NASDAQ:AAPL) sold a total of 41.3 million iPhone units, but the projected amount was 41.6 million units.

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That said, the average selling price of iPhones jumped in the quarter as buyers opted for top-of-the-line X and 8 models, according to Apple.

After last week's investor-led beating of Facebook - on Thursday, Facebook had the single worst day in stock market history, losing more than $120bn from its market cap as its stock tanked over 20% - Apple's numbers are likely to give a measure of relief to FAANG-wary investors. Analysts forecast US$9.2 billion.

Apple said its gross profit margin will be 38 per cent to 38.5 per cent in the fiscal fourth quarter, versus analysts' estimates of 38.2 per cent. But Apple and Samsung are also eyeing other areas of their businesses for growth.

Mr Maestri said sales from Apple Care, the company's warranty offering, were up 27 per cent versus a year ago, though the company did not disclose a dollar figure for sales.

Apple is looking at whether it will be hit by tariffs on purchases the company must make, possibly "related to data centers", Cook said on a conference call with investors. 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.

Another category potentially affected by tariffs is the Apple Watch, which is one of Apple's growth drivers.

Other reports by MaliBehiribAe

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