Apple delivers upbeat outlook despite shrinking iPhone sales
Apple delivered upbeat guidance for the rest of 2019 and beat analyst estimates for its fiscal third quarter, suggesting more momentum than expected even as iPhone sales shrink.
The iPhone maker recorded revenue of $53.8bn in the quarter that ended in June, 1 per cent more than a year ago and ahead of the $53.4bn expected by analysts in a Refinitiv poll.
Earnings per share were $2.18, down 7 per cent from a year ago but above analyst projections for $2.10 a share. Net income fell 12.8 per cent to $10bn.
The Cupertino, California-based tech giant said fourth-quarter revenue should come in between $61bn and $64bn, versus estimates of just $61bn.
The projection implies that Apple is optimistic for the September quarter, when it launches new services for video-streaming, gaming, and its first foray into credit cards.
Shares in Apple rose more than 3 per cent in after-hours trading.
“Outside of the iPhone, the company is growing at 17 per cent,” Luca Maestri, Apple’s finance head, told the Financial Times. “When you combine services and wearables — categories that almost didn’t exist a few years ago — you combine those two businesses and they are already approaching the size of a Fortune 50 company, growing in strong double-digits.”
iPhone sales accounted for just under $26bn of overall revenue last quarter, or 48 per cent — the lowest since 2012. But its services business grew nearly 13 per cent to $11.5bn and wearables grew 48 per cent to $5.5bn.
“This was our biggest June quarter ever — driven by all-time record revenue from Services, accelerating growth from Wearables, strong performance from iPad and Mac and significant improvement in iPhone trends,” said Tim Cook, Apple’s chief executive.
“These results are promising across all our geographic segments, and we’re confident about what’s ahead. The balance of calendar 2019 will be an exciting period, with major launches on all of our platforms, new services and several new products.”