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Apple reports solid June quarter on services, wearables growth

Apple reports solid June quarter on services, wearables growth

Apple announced solid June-quarter earnings fueled by a ramping services business and growing wearables sales.

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The company reported revenues of $53.8 billion, an increase of 1% from the year-ago quarter. A consensus of Yahoo analysts predicted revenues of $53.39 billion. Earnings per share came in at $2.18, versus the $2.10 expected by Bloomberg analysts.

Highlights:

  • Services revenue was $11.5 billion, versus $11.9 billion expected by Bloomberg analysts.
  • iPhone revenue: $26 billion versus $26.5 billion analyst expectation.
  • International sales accounted for 59 percent of the quarter’s revenue.

Wearables, smart home, and accessories products brought in $5.5 billion in revenue, most likely because of Apple Watch and AirPods sales (Apple doesn’t break these out). In last year’s June quarter, sales from these products were just $3.7 billion.

Apple’s services business, which includes the App Store, Apple Music, iCloud, and other services, grew to $11.5 billion in sales, versus $10.2 billion in the same quarter last year.

“This is the first time since 2013 where iPhones did not account for the majority of Apple’s revenue in a quarter,” said eMarketer principal analyst Yoram Wurmser in a statement. “With iPhone sales dipping, Apple is trying to get more money from existing iPhone owners by promoting new services. That’s working, but the most promising number may be the wearables figure, likely representing strong growth in sales of Apple Watch and AirPods.”

Apple stock rose 3% in after-hours trading on the earnings news. Investors may also have been cheered by Apple’s prediction of between $61 billion and $64 billion in revenues for the September-ending quarter.

“This was our biggest June quarter ever—driven by all-time record revenue from Services, accelerating growth from Wearables, strong performance from iPad and Mac and significant improvement in iPhone trends,” said Apple CEO Tim Cook.

“These results are promising across all our geographic segments, and we’re confident about what’s ahead. The balance of calendar 2019 will be an exciting period, with major launches on all of our platforms, new services and several new products,” Cook said.

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