Apple's $52.6B fourth quarter is nothing compared to what it expects to do next quarter

Apple's $52.6B fourth quarter is nothing compared to what it expects to do next quarter

Sales could top $90 billion.

Credit: Agam Shah

Apparently the iPhone 8 isn’t selling as poorly as people think.

In the quarter ending September 30, Apple Thursday reported revenue of $52.6 billion, an increase of 12 per cent from the year-ago quarter’s $46.9 billion, and quarterly earnings per diluted share of $2.07, up 24 per cent from $1.67 in 2016.

Apple sold 46.7 million iPhones, 10.3 million iPads, and 5.4 million Macs during the quarter, all healthy increases over the prior year. The Mac and iPad units both saw double-digit increases in year-over-year sales.

Perhaps more importantly, Apple’s guidance for the all-important holiday quarter is extremely strong, with a range of between $84 billion and $87 billion.

That would set an all-time record that eclipses last year’s $78.4 billion. And keep in mind that Apple is extremely conservative with its guidance, so revenue could easily top $90 billion.

Apple’s international sales were particularly strong, accounting for more than 60 per cent of the quarter’s revenue. The all-important China market was up 12 per cent year over year.

The fourth quarter also represented Apple’s best for Services, which includes Apple Music, App Store sales, and Apple Pay. And it’s “Other” category, which contains Apple Watch and Apple TV sales, was up more than 36 per cent over the same quarter last year.

Apple announced its earnings on the eve of the iPhone X launch, and it’s holiday guidance suggests it expects to sell a whole lot of the new handset.

Supplies are extremely constrained, but Apple clearly expects that to alleviate as the holiday shopping season commences. Last year Apple sold 78.3 million iPhones, but the guidance here would likely mean iPhone sales top 80- million this holiday season.

Apple CEO Tim Cook had this to say about Apple’s strong earnings: “With fantastic new products including iPhone 8 and iPhone 8 Plus, Apple Watch Series 3, and Apple TV 4K joining our product lineup, we’re looking forward to a great holiday season, and with the launch of iPhone X getting underway right now, we couldn’t be more excited as we begin to deliver our vision for the future with this stunning device.”

Apple’s stock was up more than three per cent in after-hours trading in response to the news.

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