Apple Inc. (NASDAQ: AAPL) Tuesday reported quarterly revenue and profit that topped analysts’ estimate despite the continued slump in iPhone sales. The shares rose the most in 18 months as the company sees better-than-expected sales in next quarter.
The Cupertino, California-based company said that fiscal third-quarter revenue fell 14.6 percent to $42.36 billion, compared with $49.6 billion a year earlier. The result beat analysts’ estimate of $42.1 billion.
Net income fell 27 percent to $7.8 billion, or $1.42 per share in the quarter ended June 25, compared with $10.68 billion, or $1.38 per share in the same period a year ago. The Wall Street had projected the earnings of $1.38 a share.
This marked the second straight quarterly revenue decline for Apple. IPhone unit sales, which account for most of Apple’s revenue, fell 15 percent to 40.4 million. However, the strong sales of the iPhone SE eased the slump in iPhone sales. The less-expensive model starts at $399, compared with $649 for iPhone 6S.
“The customer demand for our products was significantly stronger than we had anticipated at the beginning of the quarter,” Chief Financial Officer Luca Maestri said in an interview. “We were not able to fulfill iPhone SE demand throughout the quarter. We have now been able to put in enough capacity to provide sufficient supply for the next quarter.”
Apple is facing strong competition in China. Sales in China, including Hong Kong and Taiwan, fell 33 percent to $8.85 billion in the third quarter. Apple’s biggest rival in China is Huawei technologies Co., who said it would ship 140 million smartphones this year. Huawei is targeting at the low-price smartphone market, where Apple doesn’t have much market share.
The company expected sales to be $45.5 billion to $47.5 billion in the current quarter ending September, topping analysts’ estimation. Shares jumped more than 6 percent in the early trading.