Apple took a giant leap toward becoming the first public company worth one trillion dollars after the company's shares soared after hours. The rally came after Apple reported its earnings for the third fiscal quarter, which included the three month period from April through June. Even though sales of the Apple iPhone rose less than 1% to 41.3 million for the quarter (slightly under Wall Street estimates), revenue attributed to the device rose a strong 20% year-over-year to $29.91 billion. That was due to a 20% rise in the Average Selling Price for the iPhone, to $724. The strong gain in ASP indicates strong sales of the premium priced iPhone X
. In fact, one out of every four iPhone units sold in the quarter was the tenth anniversary model.
However, according to Strategy Analytics, Huawei topped Apple with shipments of 54 million smartphones in the period. That means that globally, Apple was the third largest smartphone manufacturer during the quarter, with Samsung remaining on top.
What really got the stock moving was Apple's forecast for the current quarter. 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. In September, Apple expects to unveil three new models, which explains the strong forecast. We should see a 5.8-inch iPhone X
sequel and a 6.5-inch iPhone X Plus
, both with OLED panels. A third iPhone will feature a 6.1-inch LCD display and is expected to be named the iPhone 9
. This will be the most affordable of the three 2018 iPhones.
The division that includes the Apple Watch
and the AirPods
wireless ear buds saw revenue increase 37% to $3.74 billion. The company doesn't breakdown individual Apple Watch sales, but research firm IDC expects Apple to ship 20.2 million timepieces this year for a gain of 20.2% over last year's figure. The Apple iPad continues to feel the heat from weaker demand for tablets; sales of the device declined by 5% in the fiscal third quarter. During the period, 11.5 million iOS tablets were sold.
"We’re expanding our reach into emerging markets and seeing strong double-digit growth in revenue, and we’re making great progress toward our goal of significantly expanding our services business."-Tim Cook, CEO, Apple
Overall, Apple reported higher growth in revenue for the 17th straight quarter with sales hitting $53.27 billion. That was a gain of 17%, topping Wall Street's expectations and Apple's own internal forecast. Profit also topped Wall Street forecasts coming in at $11.52 billion or $2.34 a share.