Apple Inc. released its third fiscal quarter earnings report after closing bell tonight, posting earnings of $1.42 per share on sales of $42.4 billion. Analysts had been expecting earnings of $1.40 per share on $42.1 billion in sales. In last year’s June quarter, the iPhone maker posted adjusted earnings of $1.85 per share on $49.6 billion in revenue.
Apple beats on iPhone units
Apple Inc. (NASDAQ:AAPL)’s gross margin declined to 38% from 39.7% last year. International sales made up 63% of Apple’s total revenue. The company shipped 40.4 million iPhone units for a total of $24.05 billion in revenue, representing a 15% year over decline in iPhone units and 23% year over year decline in iPhone revenue. Analysts were expecting Apple to ship 40 million iPhones, and the company sold 48 million iPhones in the year-ago quarter. The company shipped 9.95 million iPads, beating Wall Street’s consensus of 9 million. iPad revenue totaled $4.9 billion. The company sold 4.25 million Macs for $5.2 billion in revenue.
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Services sales increased 19% from last year with App Store revenue setting a new record. However, Other Products revenue plunged 16% to $2.2 billion. The Other Products segment contains the Apple Watch, iPod and other products.
Apple’s Greater China revenue plunges again
“We are pleased to report third quarter results that reflect stronger customer demand and business performance than we anticipated at the start of the quarter,” Apple Chief Executive Tim Cook said in a statement. “We had a very successful launch of iPhone SE and we’re thrilled by customers’ and developers’ response to software and services we previewed at WWDC in June.”
Americas revenue declined 11% to $18 billion, while Greater China revenue plummeted again for the second quarter in a row, falling 33% year over year to $8.85 billion. This is especially concerning as this is a 29% decline from the previous quarter, which saw a 26% year over year decline in sales for Greater China.
Japan sales grew 23%, while revenue from the Rest of the Asia Pacific region plunged 20%. Revenue from Europe declined 7% year over year, making Japan the only part of the world where Apple’s sales grew from last year.
Apple’s guidance solid
For its fourth fiscal quarter, Apple expects between $45.5 billion and $47.5 billion in sales, which is solid compared to the consensus of $45.71 billion. The company expects its gross margin to be between 37.5% and 38%.
Shares of Apple stock surged in after-hours trade, increasing by as much as 4.98% to $101.48.