NEW YORK--Apple Inc sales led by the pricey iPhone X pushed quarterly results far beyond Wall Street targets on Tuesday, with subscriptions from App Store, Apple Music and iCloud services bolstering business.
Apple also forecast revenue above expectations for the fall, when it typically launches new iPhone models, reassuring a nervous tech sector that saw sell-offs last week in Facebook Inc, Twitter Inc and Netflix Inc on concerns about their future growth. Apple also regained growth in China, where sales rose 19 percent.
Apple has responded to a plateauing global smartphone market by launching ever-more expensive phones and diversifying into services. Chief Executive Tim Cook credited "wearables", a category which includes wireless earphones and the Apple Watch, with making growing contributions as well.
And Apple has used its pile of cash to buttress share prices, buying back $20 billion in stock in the quarter, part of a $100 billion stock buyback program. "The lesson Apple’s management has learned from the iPhone X, is when you sell a smartphone for more than $1,000 you can sell fewer units and still reap the financial benefits," said analyst Thomas Forte from D.A. Davidson & Co.
Shares rose 3.4 percent to $196.80 in after-hours trade. With a market capitalization of more than $900 billion, Apple is tickling at the title of world's first trillion-dollar company.
Apple sold 41.3 million iPhones in the fiscal third quarter, below expectations of 41.8 million units, but the average iPhone selling price hit $724, beating analyst expectations of $694, according to data from FactSet. Apple Chief Financial Officer Luca Maestri told Reuters that customers were buying costlier models and the $999 iPhone X was the quarter's best seller.
Apple posted third-quarter revenue of $53.3 billion and profits of $2.34 per share, compared with analyst estimates of $52.3 billion and $2.18 per share, respectively, according to Thomson Reuters I/B/E/S.
The world's most valuable technology company also forecast revenue of $60 billion to $62 billion for its fiscal fourth quarter, which will include early sales of soon-to-be-announced phone models, beating the $59.6 billion analysts expected, according to data from Thomson Reuters I/B/E/S.
