Apple Shares Hit Record High Buoyed By Strong iPhone Sales, Resurgent iPad
Investors are pouncing on shares of Apple like a meaty bone thrown into a pack of hungry wolves after the Cupertino outfit posted earnings that came in higher than analysts had estimated. Apple shares climbed more than 6 percent in after hours trading and are currently trading at nearly $159, resulting in a market capitalization of more than $828 billion.
It was a good quarter for Apple, to say the least. The company posted revenue of $45.4 billion with quarterly earnings per diluted share of $1.67, compared to revenue of $42.4 billion and earnings per diluted share of $1.42 in the same quarter a year ago. Apple also noted an all-time quarterly record in services revenue driving by its App Store.
"With revenue up 7 percent year-over-year, we’re happy to report our third consecutive quarter of accelerating growth and an all-time quarterly record for Services revenue," said Tim Cook, Apple’s CEO. "We hosted an incredibly successful Worldwide Developers Conference in June, and we’re very excited about the advances in iOS, macOS, watchOS and tvOS coming this fall."
Given that Apple is on the cusp of releasing a new iPhone model—a tenth anniversary model, at that—it would have been reasonable to expect revenue to be flat on soft phone sales. However, things did not play out that way. Consumers continued to purchase current and previous generation iPhone models, snatching up more than 41 million handsets in the third quarter.
Apple also saw strong iPad sales at a time when interest in tablets has been waning. Consumers purchased more than 11.4 million iPad devices, compared to less than 9 million iPad tablets in the previous quarter.
"We reported unit and revenue growth in all our product categories in the June quarter, driving 17 percent growth in earnings per share," said Luca Maestri, Apple’s CFO. "We also returned $11.7 billion to investors during the quarter, bringing cumulative capital returns under our program to almost $223 billion."
Looking ahead to Apple's fiscal 2017 fourth quarter, the company estimated revenue to be in the range of $49 billion to $52 billion. The high numbers are indicative of a new iPhone model looming right around the corner, with an announcement likely to take place in September or October.
Thumbnail Image Source: Flickr (iphonedigital)