Apple Inc. projected revenue in the current quarter that topped analysts’ estimates, signaling the company is optimistic about potential sales of the new iPhone models set to launch late in the period.
Fiscal fourth-quarter sales will be US$61 billion to US$64 billion, the Cupertino, California-based company said Tuesday in a statement. Analysts, on average, estimated US$61 billion, according to data compiled by Bloomberg. Apple’s projection at the high end is a 1.7 per cent increase from the period a year earlier.
The forecast suggests the company anticipates that its next iPhone lineup, which won’t be a major change from the 2017 and 2018 models, and increasing revenue from services will be strong enough to return the company to growth. Apple typically puts its new iPhones on sale toward the end of the fourth quarter.
“Investor expectations were pretty low going into the quarter, and the numbers beat in many segments, and the guidance was strong,” said Shannon Cross of Cross Research. “We’re seeing indication of strong product refreshes and launches as we move in to the fall and optimism around China.”
Apple reported that sales in the period ended June 29 gained 1 per cent to US$53.8 billion from a year earlier, beating analysts’ estimates of US$53.4 billion.
“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,” Chief Executive Officer Tim Cook said in the statement.
Shares jumped about 4 per cent in extended trading after closing at US$208.78 Tuesday in New York. The stock has gained 32 per cent this year.
Net income was US$10 billion, or US$2.18 a share, in the fiscal third quarter, compared with US$11.5 billion, or US$2.34 a share, a year earlier. Analysts estimated US$2.10 a share.
Apple is struggling with stagnant smartphone demand as people take longer to replace their gadgets and Chinese rivals like Huawei Technologies Co. grab market share. The trade war is also denting Chinese economic growth while souring consumers there on American brands.
The Cupertino, California-based company made a concerted effort in the first three months of the year to revive disappointing iPhone sales, resorting to discounts, generous trade-in offers and new financing options to lure buyers. Those measures continued the past quarter.
Despite holding a glitzy launch event in March previewing four major new services, the company has only managed to roll out one so far, Apple News+, which has not been as successful as the company projected. Cook confirmed on a conference call that a branded credit card will launch in August, as Bloomberg News had reported. Cook also said that thousands of Apple employees have been testing the Apple Card, which is a partnership with Goldman Sachs Group Inc. Those services still mostly require the iPhone.
Services revenue reached US$11.5 billion in the period, a quarterly record, but short of analysts’ estimates of about US$11.9 billion.
The company earlier this year stopped announcing unit sales for iPhones, Macs, and iPads, but still reports revenue for those devices.
- IPhone revenue was about US$26 billion in the quarter, falling short of analyst projections of US$26.5 billion. That’s a strong year-over-year decline from last year’s US$29.5 billion.
- IPads generated sales of US$5.02 billion, meeting projections of US$5 billion from analysts.
- Mac revenue was US$5.82 billion, topping estimates of US$5.4 billion and an increase from last year’s US$5.3 billion.
- The company said it had US$5.52 billion in wearables revenue, its category for the Apple Watch, and AirPods and Beats headphones. That’s an increase from US$3.7 billion a year ago and topped analyst projections of US$4.85 billion.
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