Apple Inc. (NASDAQ: AAPL) stock rose 5% on August 1st, 2018 (as of 10:36 AM GMT-4; Source: Google finance) after the company reported better than expected results for the third quarter 2018 driven by continued strong sales of iPhone, services and wearables. The company for the third quarter 2018 has reported a $11.5bn, which is a growth of 32% from the same period a year ago
AAPL in the third quarter of FY 18 has reported the adjusted earnings per share of $2.34, beating the analysts’ estimates for the adjusted earnings per share of $2.18. The company had reported the adjusted revenue growth of 17 percent to $53.3 billion in the third quarter of FY 18, beating the analysts’ estimates for revenue of $52.34 billion. AAPL sold around 41.3m iPhones during the quarter, little changed from the 41m it sold in the same period a year ago, as consumers shrugged off higher prices for Apple’s flagship iPhone X model. Further, AAPL’s postings showed that the average iPhone sold cost $724 (£552), far outweighing previous expectations that the average price would come in at $694, according to the data providing service FactSet. During the third quarter, the best selling model was the IPhone X, which retails for $999.
AAPL’s numbers also reflect increasing demand for “other products”, including Apple Watch, once considered a weak offering, but which sold around 3.5m units during the third quarter. Overall, “other products”, which also includes AirPods earphones, Apple TV and HomePod speaker systems, reported a sales increase for the quarter of 37% year-on-year.
Moreover, AAPL has also reported strong growth in its fastest-growing services division, that includes Apple Music, now the largest music streaming services in the US. Along with various online TV, news and publishing, gaming and cloud-hosting services, AAPL is targeting $50bn in annual services revenues by 2020.
For the fourth quarter, AAPL expects revenues of between $60b and $62bn, including any advance sales of the company’s coming new models of iPhone. The company has declared a cash dividend of $0.73 per share of the company’s common stock.
Meanwhile, while AAPL has a market valuation above $900bn, the company could be face challenging situation ahead if President Donald Trump imposes tariffs that impact the import of its devices into the US. Mr Trump has yet to say exactly which product categories he might target with tariffs on Chinese goods, but the taxes could potentially impact products like the Apple Watch, which is one of the company’s main growth drivers.