Apple Reports Q3 Earnings of $45.4 Billion, Up 7 percent From Last Year
It seems like Apple is enjoying its good run in the year 2017, as the tech giant reported $8.7 billion in profit ($1.67 per share) on $45.4 billion in revenue for its fiscal 2017 third quarter ending July 1, 2017. This result is a 7% increase for the company from its last year’s $42.358 billion in the same quarter. The results were a pleasant surprise for the investors as the analysts had expected Apple to earn $1.57 a share on sales of $44.89 billion in the fiscal third quarter.
“With revenue up 7 percent year-over-year, we’re happy to report our third consecutive quarter of accelerating growth and an all-time quarterly record for Services revenue,” said Tim Cook, Apple’s CEO. “We hosted an incredibly successful Worldwide Developers Conference in June, and we’re very excited about the advances in iOS, macOS, watchOS and tvOS coming this fall.”
It was no surprise as Apple’s iPhone sales of 41 million units accounted for 54.7% of the total revenue (i.e. $24.846 billion) in the third quarter. The iPhone sales are 2% increase from last year’s 40.399 million and a 3% increase in iPhone revenue from $24.048 billion.
“If you look at the products, we sold 41 million iPhones, but frankly it’s better than that because we also reduced channel inventories by 3.3 million,” CEO Tim Cook told CNBC. “If you look across the world, we had several markets in Asia, in Latin America, and the Middle East which grew more than 25 percent year on year. If you look at [iPhone] 7 in the [iPhone] 7 Plus, we grew strong double-digit year on year compared to the 6S plus a year ago. So iPhone was terrific.”
Similarly, iPad sales jumped from 9.950 million to 11.424 million, which is a 15% increase in units sold. In fact, iPad sales were even more when substantially compared to the 8.9 million iPads sold during the quarter ending March 31, 2017. Macs only saw a 1% increase (though not substantially) in units sold, which was boosted by the launch of new iMac, MacBook, and MacBook Pro models at its Worldwide Developers Conference in early June. The Mac sales figures were up from 4.252 million to 4.292 million units during the same quarter last year.
International sales accounted for 61 percent of the quarters’ revenue, and gross margin was 38.5 percent in the year-ago quarter. Apple also declared a quarterly dividend payment of $0.63 per share, payable on August 17, 2017 to shareholders as of the close of business on August 14, 2017.
“We reported unit and revenue growth in all our product categories in the June quarter, driving 17 percent growth in earnings per share,” said Luca Maestri, Apple’s CFO, who added that “We also returned $11.7 billion to investors during the quarter, bringing cumulative capital returns under our program to almost $223 billion.”
On the other hand, Apple’s tablet line-up only received a 2% increase in revenue, from $4.876 billion to $4.969 billion, which is probably due to the fact that the company’s latest iPad is cheaper than previous models at $329. Further, PC line-up saw an increase of 7% in revenue, jumping from $5.239 billion to $5.592 billion.
For its coming fourth fiscal quarter, Apple says that it is looking to earn between $49 billion and $52 billion, with a gross profit margin between 37.5% and 38%, which is largely driven by the trivia of new iPhone models expected to launch this September.
As soon as the report was announced, the share prices of Apple jumped to more than 5 percent from its closing price of $150.05.