Tech: Apple stock surges to all-time high as forecast hints at strong sales boost (AAPL)
Apple hit an all-time high after a big earnings beat.
Apple stock is surging after it beat Wall Street's expectations for earnings per share and revenue, and the stock is up over 5% after-hours.
Apple also issued strong revenue guidance for its fourth fiscal quarter, suggesting strong sales growth year-over-year.
The strong guidance also hinted at the launch of a redesigned iPhone in September, which is expected to sell briskly.
Although CEO Tim Cook had warned that iPhone sales might see a "pause" ahead of the expected September launch of the new iPhone, iPhone unit sales were in line with Wall Street expectations and in line with last year's performance.
Notably, Apple sold 14% more iPads than it did a year ago, breaking a 13-quarter streak of year-over-year declines. However, revenue was only up 2% on an annual basis, suggesting that many of these sales were of the less expensive $329 iPad Apple introduced during the quarter.
One trouble spot in the earnings was Apple's performance in China, which was down 10% year-over-year.
Here are the key results:
Q3 EPS (GAAP): $1.67, up 17% year-over-year, vs expectations of $1.57
Q3 revenue: $45.4 billion, up 7% year-over-year, vs expectations of $44.95 billion
Gross margin: 38.5%, up 1% year-over-year, vs expectations of 38.2%
iPhone unit sales: 41.0 million, up 1% year-over-year, vs expectations of 41.1 million
iPad unit sales: 11.42 million, up 14% year-over-year
Mac unit sales: 4.292 million, flat year-over-year
Q4 revenue guidance: $49 billion – $52 billion vs expectations of $49.21 billion
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Notes from the call
[5:00] Hold music has started. We're expecting CFO Luca Maestri and CEO Tim Cook today.
[5:02] And we're off. Tim Cook calls the results "very strong" and predicts that Apple will "extend" its competitive lead this fall, potentially hinting at a big iPhone launch this fall.
[5:04] Cook says there was a lot of demand at the high end of the iPhone lineup. "One decade after the iPhone launch, we have passed 1.2 billion cumulative iPhones sold."
[5:05] Cook says that its services business is the size of a Fortune 100 company, which is faster than the company had predicted. (Apple predicted it would happen this year.)