Apple blows past Wall Street expectations to post strong results as China revenue grows

PUBLISHED : Friday, 03 November, 2017, 6:51am
UPDATED : Friday, 03 November, 2017, 6:51am

Apple shook off some fears about waning iPhone sales, soaring past estimates for its fourth-quarter earnings and posting sales increases in every product category.

Analysts expected earnings of US$1.87 per share and revenue of US$50.7 billion, according to FactSet. The firm was also expected to sell 46 million iPhones, analysts said.

Apple exceeded all metrics, reporting it had sold 46.7 million iPhones, and made profit of US$2.07 per share on revenue of US$52.6 billion. Shares, which closed at US$168.11 per share, were up nearly 3 per cent after the report.

Apple also said it returned to revenue growth in China, bringing in US$9.8 billion versus US$8 billion a year ago. The company had doubled its revenue in India during the fiscal fourth quarter.

But the numbers that most Apple watchers were focused on were those outlining what the company expects to see for the next quarter. Analysts were looking for guidance from Apple that mirrors the questions playing out in many Apple fans’ minds across the country: iPhone X or iPhone 8?

The iPhone 8 and iPhone 8 Plus went on sale in October, boasting improvements to the camera and the addition of wireless charging. But retailers and analysts had reported slower than usual sales for a new iPhone model, which many attributed to the fact that Apple has a new, more premium model, of the iPhone set to hit stores on Friday. Pre-orders opened last week.

Apple did not disclose how many customers had placed pre-orders of the iPhone X, nor did its release comment on speculation iPhone X demand has hurt iPhone 8 sales. But it forecast profit next quarter, which is traditionally its largest for sales due to the holidays, for somewhere between US$84 billion and US$87 billion. That’s higher than it expected during the same period last year, US$76 billion and US$78 billion, and slightly above analyst expectations.

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For investors in Apple, which is still among the most widely held stocks in the country, that may quell worries about iPhone 8 sales, and indicate that the higher price of the iPhone X will keep Apple rolling in cash even if demand for the standard iPhone drops.

Perhaps unsurprisingly, Apple itself struck an optimistic tone.

“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 chief executive Tim Cook said in a release. Apple has been flirting with a trillion-dollar valuation, and had a value of US$868 billion at market close.

The company also did not say whether it had concerns about building enough iPhone X units to satisfy demand; many analysts have said they’ve already factored likely delays that could stretch well into 2018 into their forecasts.

The iPhone X is not the only product Apple is releasing this holiday season. The company is also set to sell the HomePod, a Siri-powered speaker to answer both Amazon’s Echo line and Google’s Home speakers.

With additional reporting from Agence France-Presse