Following weeks of great speculation, dropping stock prices and an undercurrent by analysts that the earnings report by Apple might mark the start of the end for iPhones due to sales being weak, Apple’s results were released and they easily passed Wall Street expectations.
Tim Cook spoke to investors as the earnings for Apple’s second quarter were released on Tuesday saying that people chose the iPhone X more than any of the other iPhones during each week of the March quarter just as they have done following the launch of the smartphone during the December quarter.
He added that this was the first cycle where the top iPhone model had also been the lineups most popular.
Cook shared a great deal with Apple investors during his call, including the strong performance by Apple Services, which is home to Apple Music, the App Store and Apple Pay, a large increase in its subscriptions services as well as much larger than had been expected in China.
However, as is always the case, everyone was looking to the iPhone, and how sales grew, as the most reliable predictor of the overall health of the Cupertino, California based tech giant. For most investors, the numbers came in where they wanted them to.
Revenue at Apple was up 16% compared to the same quarter one year ago ending the three-month period at $61.1 billion. It represented revenue’s fastest growth in the last two years and beat estimates on Wall Street of $60.9 billion. Forecasts for revenue for its next quarter fell between $51.5 billion and $53.5 billion, which also beat estimates.
Apple during its second quarter sold 52.2 million iPhones which was an increase of 2.9% from the same period one year and just below the analyst’s predictions of 52.3 billion.
However, sales of iPhones were far ahead of many diminished predictions that have surfaced the past couple of weeks as data from suppliers made the rounds and worried investors. The per phone price of $728 was slightly below the analyst consensus that was $740.
Apple posted a record for its services revenue of just over $9.2 billion representing a growth rate of 31% year on year and easily beat analysts who were expecting $8.3 billion.
CEO Cook said that all component parts of the services segment the App Store, iCloud storage, Apple Pay and Apple Music posted record sales and a minimum of 25% growth.