Apple reports best June quarter ever – strong iPhone, Services and Wearables sales

First U.S company to hit USD1 trillion valuation milestone
WWDC 2018 Tim Cook

It’s a rosy kind of summer for Apple. Blooming even. The company has just announced financial results for the past three months and things look great. Apple posted a quarterly revenue of USD53.3 billion, it’s best-ever third quarter in the company’s history.

It’s Apple’s fourth consecutive quarter of double-digit revenue growth. Apple CEO, Tim Cook said that the growth was driven by continued strong sales of iPhone, its Services business and wearables.

The record-breaking quarterly revenue is an increase of 17 percent from the year-ago quarter, and quarterly earnings per diluted share of USD2.34, up 40 percent.

International sales accounted for 60 percent of the quarter’s revenue.

Despite rising competition, iPhones continue to sell well. In April, Tim Cook revealed that the iPhone X was the best-selling model during Apple’s best March quarter ever.

iPhone X iOS 11.1.2

Apple’s approach to its smartphone line-up has differed over previous years’. It now has three flagship devices instead of the traditional two. The iPhone X, the 10th anniversary iPhone, continues to be popular although it is the priciest model in the line-up.

In the past quarter, Apple sold 41.3 million iPhones, up slightly from the 41.03 million units it sold in the year-ago quarter. Revenues from iPhone sales were also up 20 percent compared to the year-ago quarter.

Another contributor to Apple’s record quarter is its wearables business covering products like Apple Watch, AirPod, HomePod, iPod, Beats, and more. These are classified under its “Other Products” business. While Apple doesn’t break out unit sales of its products, the wearables segment saw a 60 percent hike in revenue. Adding up the past four quarters, wearables revenue contributed more than USD10 billion to the bottom line.

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There’s big growth in Apple’s services business which includes iCloud, Apple Care, Apple Pay, Apple Music, iTunes, Apple Store and licensing. The business surged more than 30 percent year-over-year, contributing USD9.55 billion into Apple’s huge war chest.

Tim Cook pointed out a surge in subscriptions to Apple Services and third-party apps contributed to the encouraging growth in the services segment.

What’s also interesting is that Apple Music grew over 50 percent since last year. Should Spotify worry?

The new, accessible 2018 iPad drove iPad sales, which saw Apple selling more tablets this quarter compared to previous. However, this has failed to buck the trend of flat tablet sales year-over-year.

Things aren’t so rosy in the Mac space. The company sold just 3.72 million Macs over the past three months, a 13 percent drop from the year-ago quarter and a 9 percent drop from the previous quarter.

Luca Maestri, Apple CFO said the company achieved a net income of USD11.5 billion with an operating cash flow of USD14.5 billion. Apple returned almost USD25 billion to investors through its capital return program during the quarter, including USD20 billion in share repurchases.

Apple’s board has also declared a cash dividend of USD0.73 per share of the company’s common stock.

iPhone X Plus

Great news overall for Apple, however what will be interesting to watch will be the next quarter when it is slated to reveal a trio of new iPhones and rumoured 2018 iPad Pro.

Apple provided guidance of its fiscal 2018 fourth quarter financial results which includes revenue of between USD60 billion and USD62 billion, gross margin between 38 percent and 38.5 percent, as well as operating expenses of between USD7.95 billion and USD8.05 billion.

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Source: Apple

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