Apple must be the most analyzed company in the world, with many pundits devoting careers predicting Apple’s demise. Yet the iconic, idiosyncratic company keeps proving the naysayers wrong, achieving enviable gains in its markets.
Such was the case last week, when Apple reported results for the third fiscal quarter (Q3) of 2018, results that propelled Apple’s market capitalization to above $1 trillion — the first U.S. company to reach that ethereal benchmark.
That’s good news for Broadcom, Qorvo and Skyworks, whose fortunes are tied to Apple more than they would like.
Tim Cook, Apple’s CEO, said the company achieved the best June quarter revenue and earnings, with $53.3 billion in revenue, which was 17 percent above the prior year’s quarter. Earnings per share (EPS) was $2.34, 40 percent above the prior year’s period.
Apple shipped 41.3 million iPhones during the quarter, 0.7 percent above the prior year’s quarter and down 21 percent sequentially. Cook said iPhone revenue grew 20 percent year-over-year, with the iPhone X remaining the most popular iPhone in the quarter. Quoting estimates from IDC, Cook said iPhone sales grew faster than the overall smartphone market and gained share in many regions, including the U.S. and China.
iPhone average selling price (ASP) was $724, up 20 percent year-over-year and down slightly from $728 in Q2.
The iPhone contributed 56 percent of Apple’s total revenue. Services was Apple’s second biggest segment, at 18 percent and growing 31 percent year-over-year to $9.5 billion. The Services segment includes revenue from the App Store, AppleCare, Apple Music, Apple Pay and licensing.
Guiding for Q4 (July through September), Apple expects revenue to be between $60 billion and $62 billion. The midpoint represents 15 percent sequential and 16 percent year-over-year growth. Presumably, this doesn’t include revenue from the next-generation iPhone, which won’t likely ship until at least October.