Apple revenue, profit tops estimates

The iPhone maker is within reach of being the world's first trillion-dollar company.
Apple chief financial officer Luca Maestri says sales were strong all around the world.

The world’s most valuable company is likely to stay that way for a while yet.

Apple delivered its best-ever revenue for the June quarter, typically its weakest period, as demand for high-priced iPhones remained resilient and services such as app store sales swelled to all-time highs.

“Growth was strong all around the world,” chief financial officer Luca Maestri said in commenting on the announcement made after Wall Street’s trading session closed.

“Customers are really valuing the features in the products,” he added, referring to the iPhone X, 8 and 8 Plus.

Apple shares rose 0.2% during the session but jumped 2.6% to $US195.30 in after-hours trading. They are up 28% over the past year,

Market capitalisation stands at $US933.4 billion, well ahead of Amazon.com at $US867.8b, and puts Apple within reach of being the world's first trillion-dollar company.

Apple’s move to raise iPhone prices continues to pay off, with sales rising 14.4% to $US29.91b even as shipments rose less than 1% to 41.3 million.

Meanwhile, the company’s services business reported record revenue of $US9.55b, a 31% increase from a year ago.

The combination drove the third quarter’s total revenue up 17% to $US53.27b, above Wall Street expectations and near the high end of its own guidance. Profit rose 32% to $US11.52b, or $2.34 a share, also above analysts’ consensus estimates.

Apple expects iPhone sales to continue at a high level in the current quarter with a forecast for total revenue of between $60-62b, representing an annual increase of 14-18%.

Apple’s next three product releases will be in September. They are an update to the iPhone X, the first oversize phone with an organic light-emitting diode (OLED) display and a 6.1-inch LCD phone with facial recognition technology.

Services unit expands
The services business has become one of Apple’s biggest growth engines. The company is making progress toward its goal of $US50b in annual sales from growth in subscriptions to iCloud storage, its streaming music service and offerings such as Netflix and HBO.

Paid subscriptions now exceed 300 million, a 60% increase in the past three months, Mr Maestri said.

The division that includes Apple’s smartwatches and AirPods wireless earbuds also posted another period of strong gains, with sales rising 37% to $3.74b in the June quarter. 

“This is a product category that essentially didn’t exist three years ago,” Mr Maestri said.

Sales of iPads and Macs were the only weak areas for Apple, as revenue for both products fell 5% in the period.

Editor at Large