Apple’s pricey iPhone X, subscriptions deliver earnings beat

Apple’s pricey iPhone X, subscriptions deliver earnings beat

"We believe 350 million iPhones are in the "window of opportunity" to upgrade over the next 12 to 18 months with Apple needing to capture a majority of these units as part of this upgrade cycle to make a clearly successful iPhone product cycle in 2019 and lay the groundwork for future services/software growth and steady iPhone demand over the coming years". EPS grew by 40 percent year-over-year, and revenue grew by 17 percent year-over-year. Sales there fell dramatically in 2016 after Chinese consumers shunned the iPhone 7, whose overall appearance differed little from its predecessor.

Analysts polled by Bloomberg expect the tech giant to post earnings of $2.16 per share on revenue of $53.31 billion. Netflix and Facebook struggled after reporting earnings earlier this month (with Facebook losing a one-day record $124 billion in market value), while reports from Amazon and Google boosted their share prices.

A lower share count means Apple's stock must reach a higher price to reach a $1 trillion market capitalization. Apple may have reduced its share count since then.

Apple sold 41.3 million iPhones, only 1% more than in the same quarter a year ago.

Forward-looking guidance: Apple guided toward fourth-quarter revenue between $60 billion and $62 billion, edging out Wall Street predictions of $59.47 billion, according to StreetAccount.

Apple's sales in China also held up during the quarter.

Despite the beat, James Cordwell, an analyst from Atlantic Equities, said the high selling prices might cause investors some concern because "theres a limit to how much Apple can grow the iPhone franchise by pushing pricing".

But several of Apple's services do not face strong rivals.

He credited "wearables", a category which includes wireless earphones and the Apple Watch, with making growing contributions, and the Watch could be hit by tariffs.

APPLE has announced its profit had jumped more than 30 per cent to $US11.5 billion ($A15.5 billion) in the recently ended quarter, besting market expectations despite selling fewer iPhones than analysts projected. The figure included a one-time gain of $236 million in connection with resolving various lawsuits, which the company didn't specify.

Cook said the number of people using Apple devices is surging, and that promised to keep fuelling the strong growth seen at its streaming music, digital wallet, and App Store. But Apple saw revenue declines in both the iPad and Mac computers. Apple has hired prominent television executives from Sony Corp and started making deals for content such as a dramatic series with Hollywood stars Reese Witherspoon and Jennifer Aniston.

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