Apple Inc. (NASDAQ: AAPL) reported its third quarter financial results and topped analysts’ estimates, sending shares 4.6% higher during Wednesday’s pre-market hours. Apple’s Q3 beat now pushes the Company even closer to the USD 1 Trillion market cap mark.
At the opening bell on Wednesday, Apple’s market cap was USD 974.04 Billion.
For the third quarter, Apple reported revenue of USD 53.3 Billion, increasing 17% year over year and beating Thomson Reuters’ estimates of USD 52.34 Billion. The Company reported an EPS of USD 2.34, increasing 40% year over year and also surpassing estimates of USD 2.18.
The primary revenue driver for the quarter was attributable to international sales, as they accounted for 60% of the quarterly revenue. Despite having stronger international sales, Apple missed iPhone sales estimates. The Company sold 41.3 million iPhones, falling short of StreetAccount’s estimates of 41.79 million. Sales in Other Products such as Apple’s services and wearables grew, contributing to the Company’s strongest June quarter ever.
“We’re thrilled to report Apple’s best June quarter ever, and our fourth consecutive quarter of double-digit revenue growth,” said Tim Cook, Apple’s Chief Executive Officer. “Our Q3 results were driven by continued strong sales of iPhone, Services and Wearables, and we are very excited about the products and services in our pipeline.”
iPhone saw strong sales growth year over year, as it increased by 20% year over year. Services revenue grew by 31%, while Other Products revenue, which includes Apple Watches and AirPods grew by 37%. iPad and Mac sales both fell by 5% year over year.
Apple’s service reported revenue of USD 9.55 Billion, which topped estimates of USD 9.21 Billion, marking it as the Company’s highest quarterly revenue in the segment. Apple says the strong growth was attributable to higher paying subscribers in the App Store, a 50% year over year increase in Cloud revenue, and higher Apple Pay users.
Cook said in the earnings call that Apple Pay reported over 1 billion transaction in the quarter, tripling year over year, which is also on track to double its revenue by 2020 from 2016.
"To put that tremendous growth into perspective, this past quarter, we completed more total transactions than great companies like Square and more mobile transactions than PayPal." said Cook in the call.
For the fourth quarter, Apple is forecasting revenue between USD 60 Billion and USD 62 Billion. Apple also provides its operating expenses to be between USD 7.95 Billion and USD 8.05 Billion, while other income/(expense) is estimated to be approximately USD 300 Million. The Company has also declared a cash dividend of USD 73 cents per share.