Apple calms markets with Street-beating Q3 results

Despite its expensive price tag, the iPhone X was the best-seller in Apple's fiscal third quarter.

Apple posted better-than-expected earnings results for its fiscal third quarter, calming jittery investors who had witnessed sell-offs in stocks of other tech giants during the past week. 
In what CEO Tim Cook described as the company's "best June quarter ever", Cupertino, California-based Apple recorded $53.3 billion in revenue, a 17 per cent jump from $45.4 billion in the same period last year. Sales in Greater China - repeatedly described by Apple as a key market - was an anchor, posting a 19 per cent leap in revenue compared to a decline of 10 per cent in the third quarter of 2017.
Investors had a nerve-wracking past week, thanks to concerns about the future growth of technology stocks, following the sell-offs seen in the shares Twitter, Netflix and, most notably, Facebook.
Apple restored some sanity by beating estimates. Its latest three-month fiscal period is also "our fourth consecutive quarter of double-digit revenue growth", Cook said, adding that its services segment, wearables and the iPhone were the drivers thanks to "strong sales". Wearables include the Apple Watch, AirPods and Beats products. 
Apple's fiscal third quarter is usually tepid since users have either upgraded to the latest iPhone or are anticipating its next iteration, which is typically launched in September. Despite its expensive price tag, however, the 10th-anniversary iPhone X led the charge: revenue for Apple's flagship rose 20 per cent, compared to a pedestrian 3 per cent last year. 
While no specifics were given, Cook said that the iPhone X was their best-seller.
The services area continued to shine: its 31 per cent rise to $9.55 billion is an all-time high and compared to a 22 per cent growth in the same period a year ago.
Other products - which includes wearables - grew 31 per cent against a 23 per cent growth last year. While no specific sales figures were given, Cook, in the conference call early in Dubai on Wednesday, said Apple Watch growth was in the 40 per cent range. Apple Music, meanwhile, grew 50 per cent from a year ago.
iPad and Mac revenue, however, were both down 5 per cent, compared to growths of 2 per cent and 7 per cent, respectively, last year. The former, however, posted its fifth-straight quarter of unit-sales growth. Macs, meanwhile, were affected by the rollout of new units in the fourth quarter instead of the third, Luca Maestri, Apple's chief financial officer, said in the call.
Cook said the third-quarter results was the seventh-straight three-month period of quickening growth. The 17 per cent revenue leap is Apple's best in 11 quarters.
Services, Cook said, is on track to double its 2016 revenue by 2020. "We feel great about its momentum," he added.
The CEO also flaunted the features in Apple's upcoming operating systems, including iOS 12, macOS Mojave, watchOS 5 and tvOS 12. Said Cook of Safari 12, Apple's Web browser: "Privacy is one of the most important issues of the 21st century."
"Our strong business performance drove revenue growth in each of our geographic segments, net income of $11.5 billion, and operating cash flow of $14.5 billion," said Maestri
He added that Apple returned "almost $25 billion" to its investors through the company's capital return programme during the quarter, including $20 billion in share repurchases.
Apple also has $243.7 billion in stocks and marketable securities. As of posting time, its stock is up 0.20 per cent, and its market value is at $956.48 billion. 
- alvin@khaleejtimes.com