Apple Reports Increase of Third Quarter Revenue by 40 Per Cent

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Apple shipped 41.3 million units of iPhones with the release of iPhone X and iPhone 8 series contributing to the sales and increase of Average Selling Price

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Apple announced its third-quarter earnings report for the fiscal year 2018-19 on Tuesday and the company has reported a quarterly revenue of US$ 53.3 billion, which is a hike of 17 per cent from the corresponding quarter of the previous fiscal year of 2017-18.

Apple saw its net quarterly profit increase to US$ 11.5 billion

The world’s largest technology firm, Apple’s overall revenue in the third quarter of the previous year fiscal year 2017-18 was US$ 45.4 billion and the net quarterly profit was US$ 8.7 billion. The quarter of this fiscal that ended on June 30, saw a surge by 40 per cent from the output that was reported last year. International sales of the company contributed to 60 per cent of the overall revenue in the quarter under review.

Apple shipped 41.3 million units of iPhones in the quarter under review. However, amidst the good output in this quarter, the shipment report is a decrease of 21 per cent as compared to the second quarter of this fiscal when the company had shipped 52.2 million shipments. However, in comparison to the same quarter in the previous year, iPhone sales have gone up by 1 per cent and the overall revenue from iPhones sales till now in this fiscal as compared to the previous fiscal, has also seen an increase of 20 per cent.

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Apple’s Chief Financial Officer (CFO), Luca Maestri, stated that iPhone’s Average Selling Price (ASP) also increased by US$ 118 with the current number standing at US$ 724, up from US$ 606 a year before. Maestri pointed out that the sales of iPhone X and iPhone 8 and 8 Plus have helped cater to the increase of ASP. Bloomberg noted that even with the pricey iPhone X release, which showed poor sales, the company was able to attain a good Q3 result this fiscal – because even with sales of lesser volumes, numbers grew in double digits.

In an investor’s earnings call, Tim Cook, Apple’s CEO said: “Revenue was up 20% year-over-year and our active installed base grew by double-digits, driven by switchers, first-time smartphone buyers and our existing customers whose loyalty we greatly appreciate. iPhone X was the most popular iPhone in the quarter once again…We expect strong growth from iPhone, from services and from wearables, which has been a bit of our pattern during the course of the year.”

Other products, iPad & Services results showed good numbers while Mac declines again

Apple Services have been a big hit in the recent times. The revenue in this section rose by 31 per cent on yearly-basis with the overall revenue standing at US$ 9.5 billion versus the numbers a year back when revenue stood at US$ 7.2 billion. Additionally, Apple Pay has crossed more than 1 billion transactions and Apple Music with a current customer base of 50 million listeners, claim to be the market leader in North America and Japan.

 We recently reported that Apple watches shipped 3.5 million products all over the world with Asia contributing the most. India helped Asia sales for the company take a soar after a successful collaboration between Apple and Reliance Jio and Bharti Airtel, respectively, had happened last year. Through this partnership, Jio and Airtel released special plans to promote the e-SIM enabled Apple Watch Series 3 LTE variant that also contributed to the greatest number of sales in the company’s overall shipments.

The company’s iPad numbers also saw a sequential increase of 27 per cent with 11.5 million shipments in this quarter – a surge from the 9.1 million iPad shipped in the second quarter of the current fiscal. However, much like the iPhones, this was just a 1 per cent jump. Apple faced a 5 per cent decline in its iPad revenue on yearly-basis.

Other products of Apple such as AirPods, Beats headphones, HomePod, iPod Touch, Apple TV, Apple Watch and other accessories experienced a total revenue of US$ 3.7 billion – up by 37 per cent on yearly-basis growth from last year when it was US$ 2.7 billion. However, on a sequential basis, it was a drop by 5 per cent.

Cook said, “We’re thrilled to report Apple’s best June quarter ever, and our fourth consecutive quarter of double-digit revenue growth.”

He added, “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.”

However, Apple Mac numbers declined in the Q3 report. In this quarter, 4.07 million shipments of Mac had occurred, which was down from 4.2 million units in the same quarter of 2017-18. Additionally, the product faced a 13 per cent yearly drop in terms of units as well as a 5 per cent drop in revenue.

Goals for the upcoming fourth quarter in fiscal 2018-19

The company has laid down its mission for the forthcoming fourth quarter of the current fiscal year of 2018-19 as well. It said that it targets to achieve an overall revenue between US$ 60 billion to US$ 62 billion – crossing Wall Street prediction of US$ 59.47 billion Also, the gross margin is expected to be between 38 per cent and 38.5 per cent with operating expenses weighing down between US$ 7.95 billion and US4 8.05 billion. For the company’s other income/expenses, the number has been set to US$ 300 million.

Besides these, Apple’s board of directors have announced a cash dividend of US$ 0.73 per share of the company’s common stock. The dividend is payable on August 16 to shareholders of record as of the close of business on August 13.

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