Apple shares jumped 6.30 percent in afterhours on Tuesday following the release of their 3rd quarter results that showed the Cupertino, California based company posted better than expected revenue growth, led by strong iPad and iPhone sales.
Despite revenue weaker growth in China, which declined – 10 percent year over year, international sales accounted for 61 percent of Apple’s quarter’s revenue, and the company’s total revenue grew 7 percent year over year while EPS growth expanded 17 percent.
“With revenue up 7 percent year-over-year, we’re happy to report our third consecutive quarter of accelerating growth and an all-time quarterly record for Services revenue,” Apple’s CEO Tim Cook said during the conference call.
“We hosted an incredibly successful Worldwide Developers Conference in June, and we’re very excited about the advances in iOS, macOS, watchOS and tvOS coming this fall” Cook added.
Apple sold more iPad units for the quarter, likely through price reductions, while sales of their iPhone units also increased slightly.
Apple earns over 50 percent of their revenue from sales of their iPhones.
Apple sold 2 percent more iPhone units and 15 percent more iPads units year over year, although iPad revenue growth only increased 2 percent during the same period.
For the quarter, Apple posted quarterly revenue of $45.4 billion and quarterly earnings per diluted share of $1.67, beating the consensus estimate of $1.57, according to Zaks Investment Research.
Apple CEO Tim Cook said during the conference call that services revenue, which includes Apple Pay, Apple Music, iTunes, iCloud, and their App store, reached an all-time quarterly record of $7.3 billion, marking 22 percent growth over last year.
Cook explained that Mac revenue grew 7 percent year over year, led by the strength of the MacBook Pro and iMac, despite IDC’s latest estimate of a 4 percent unit contraction in the global PC market.
Cook said that sales of Apple Watch increased 50 percent during the quarter, and remains the number one selling smartwatch in the world by a very wide margin.
In terms of forward guidance for the next quarter, Apple expects revenue to be between $49 billion and $52 billion, gross margins to be between 37.5 percent and 38 percent, and operating expenses between $6.7 billion and $6.8 billion.
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