Published: Wed, August 01, 2018
Finance | By Marshall Campbell

Apple Flirts With $1 Trillion Market Cap After Strong Earnings Report

Apple Flirts With $1 Trillion Market Cap After Strong Earnings Report

Apple's figures also reflect increasing demand for products including Apple Watch, once considered a weak offering, but which sold around 3.5m units during the quarter, an increase of 30% year on year-on-year.

It also reported earnings per share of $2.34, beating analyst expectations of $2.18.

CEO Tim Cook said that while the company's products hadn't been hurt by tariffs imposed so far, Apple is still examining the impact of proposed U.S. tariffs on United States dollars 200 billion worth of Chinese goods. Investors sent the company's stock up $7.31, or close to 4%, in after-hours trading.

While the tech giant sold fewer of its flagship iPhones than expectedー41.3 million units versus estimates for 41.8 millionーthe average selling price of $724 was above forecasts.

IPad sales were also up slightly, to the tune of 11.55 million compared to 11.42 million during the same quarter a year ago.

During the quarter, the revenue from iPhone sales stood at $29.9 billion, which is a 20 percent gain over the same period past year.

However, the average selling price of each handset increased significantly, suggesting the company has lured its customers into shelling out more for its devices even in a slowing smartphone market.

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Apple is expected to release three new iPhone models, including a less-expensive version that will feature the edge-to-edge display and Face ID technology made popular by the iPhone X.

Apple posted third-quarter revenue of $US53.3 billion and profits of $US2.34 per share, and forecast its revenue would be between $US60 billion and $US62 billion in the fourth quarter.

Revenue from services - one of it's fastest-growing units that includes Apple Music and the App Store - climbed 31% over the same quarter in 2017, hitting $9.55 billion.

The company said it expects fiscal fourth quarter revenue to be between $60bn and $62bn, against analyst estimates of $59.5bn. The iPhone X starts at $1,000, helping. Apple also regained growth in China, where sales rose 19 per cent. Many Americans have at least one piece of Apple tech in their household, and the same can be said for residents of European and Asian countries. Analysts surveyed by Zacks had expected revenue of United States dollars 58.59 billion. Samsung's performance underscored mounting concerns that Apple, too, would be victimized by a saturated smartphone market.

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

There is also a sense that the days of soar-away sales are behind the mobile phone industry and investors are now more focused on Apple's services business - which includes Apple Music, iCloud and Apple Pay - for future growth.

Services revenue was $9.5 billion, beating analyst expectations of $9.1 billion, according to Thomson Reuters I/B/E/S.

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