Apple Forecast Tops Analysts' Estimates on New IPhones, Services

Apple Forecast Tops Analysts' Estimates on New IPhones, Services

That beat the $2.17 per share expected by 10 analysts surveyed by Zacks Investment Research.

Shares rose 3.4 percent to $196.80 in after-hours trade.

That said, iPhone and iPad sales were close to the same compared to this quarter a year ago, with 41.3 million iPhones shipped.

Apple moved 41.3 million iPhones in its third quarter, which was less than the 41.79 million Wall Street was expecting - but blew past the predicted $693.59 average selling price for a smartphone.

Sales of iPhones in the fiscal third quarter have typically been tame as many fans have historically either bought handsets in prior months or end up waiting for new models in the months to come.

However, this year the period was seen as a crucial test of the staying power of the iPhone X model, last year's overhauled device that costs up to $1,829. In the last quarter, Apple's services made $9.5 billion, making it the second-largest business segment for the firm.

As with several recent quarters, the biggest success story is Apple's services business, which includes Apple Music, iCloud, Apple Pay, the App Store, AppleCare, and more.

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The tech company posted $53.3 billion in third-quarter revenue, up 17 percent from the same quarter previous year.

Some analysts were concerned there would be a drop off in demand for the company's highest-priced iPhone X, which sports a starting price tag of $999.

After last week's investor-led beating of Facebook - on Thursday, Facebook had the single worst day in stock market history, losing more than $120bn from its market cap as its stock tanked over 20% - Apple's numbers are likely to give a measure of relief to FAANG-wary investors. Many Americans have at least one piece of Apple tech in their household, and the same can be said for residents of European and Asian countries.

Revenue rose 17 per cent to Dollars 53.27 billion, also exceeding Street forecasts for USD 52.37 billion. The higher revenue can be attributed to not just the increased iPhone sales, but also the fact that the average selling price of an iPhone is much higher than what it was a year ago. He said Apple was on target to reach its goal of doubling fiscal 2016 services revenue by 2020. The company said it expects gross margins of 38 per cent to 38.5 per cent in the fourth quarter, compared with analyst expectations of 38.3 per cent, according to Thomson Reuters I/B/E/S.

Gross margin for the quarter was 38.3 percent compared to 38.5 percent in the year-ago quarter, with global sales accounting for 60 percent of revenue.

Revenue from the app store, music subscriptions and other services grew 31 per cent to United States dollars 9.5 billion, a record for Apple.

Apple's revenue gains mark the company's best June quarter ever, according to CEO Tim Cook, noting that it's the fourth consecutive quarter of double-digit revenue growth.

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