Apple beats earnings expectations with $53.3B in revenue, stock up 3%

Apple could become the world's first trillion dollar company today

"The lesson Apple's management has learned from the iPhone X, is when you sell a smartphone for more than US$1,000 you can sell fewer units and still reap the financial benefits", said analyst Thomas Forte from D.A. Davidson & Co. The earnings beat street estimates but iPhone sales did not match consensus from most analysts.

Smartphones still drive an enormous portion of both companies' revenues and the devices are still projected to generate $78 billion in 2018, according to a new estimate from the Consumer Technology Association.

Shares in the Silicon Valley-based technology titan rose 3.96 per cent to US$197.83 in after-hours trade that followed release of the earnings figures, putting its market capitalisation at US$956 billion. Unit sales of 41.3 million fall pretty in line with Wall Street expectations (the consensus was around 41.6), but while units are up year-on-year only 1 percent, revenue over the same period is up 20 percent. Its mobile unit reported a 22 percent drop in sales revenue to $20.2 billion from the same time previous year.

The $999-priced iPhone X is a major contributor towards this "average selling price" increase and it should be noted that this price range is expected to remain the same with the imminent launch of the 2018 iPhone series. On the same day Apple was announcing another strong quarter for its iPhone business, Samsung was conceding that sales of the Galaxy S9 and S9+ are slower than expected.

Apple posted third-quarter revenue of $US53.3 billion and profits of $US2.34 per share, and forecast its revenue would be between $US60 billion and $US62 billion in the fourth quarter. The company expects to see iPhone sales from July through September rise by 14% to 18% which would indicate sales between $60 billion and $62 billion for its most important product.

"IPhone X shows that when you deliver a great innovative product there are enough people out there that would like that and it can be a very good business".

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Revenue rose 17 per cent to Dollars 53.27 billion, also exceeding Street forecasts for USD 52.37 billion.

"We're thrilled to report Apple's best June quarter ever, and our fourth consecutive quarter of double-digit revenue growth", Cook said.

Third-quarter revenue rose 17% to $53.3bn (£40.6bn), beating forecasts of $52.34bn (£39.9bn).

The maker of iPhones, iPads and other products posted revenue of nearly $53.3 billion in the period, also exceeding Wall Street forecasts.

What's propelled Apple's June earnings high and its ability to defy the challenges faced by rival tech stocks this quarter? iPhone revenue was higher than estimated. Analysts were looking for US$59.4 billion, according to data compiled by Bloomberg.

The company also reported strong growth in its fastest-growing services division, which includes Apple Music, now the largest music streaming services in the US.

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