Ap­ple’s sales could top $90bn in its next quar­ter

Com­pany’s $52.6bn fourth quar­ter is noth­ing com­pared to what it ex­pects to do next quar­ter, Michael Si­mon re­ports

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It seems that the iPhone 8 isn’t sell­ing as poorly as peo­ple think. In the quar­ter end­ing 30 Septem­ber, Ap­ple re­ported rev­enue of $52.6 bil­lion, an in­crease of 12 per­cent from the year-ago quar­ter’s $46.9bn, and quar­terly earn­ings per di­luted share of $2.07, up 24 per­cent from $1.67 in 2016.

Ap­ple’s in­ter­na­tional sales were par­tic­u­larly strong, ac­count­ing for more than 60 per­cent of the quar­ter’s rev­enue. The all-im­por­tant Greater China mar­ket was up 12 per­cent year over year.

Ap­ple sold 46.7 mil­lion iPhones, 10.3 mil­lion iPads, and 5.4 mil­lion Macs during the quar­ter, all healthy in­creases over the prior year. The Mac and iPad units both saw dou­ble-digit in­creases in year-over-year sales. Ap­ple CFO Luca Maestri said sales of Mac­Book Pros drive Mac growth, while iPad sales were up more than 25 per­cent in China.

Per­haps more im­por­tantly, Ap­ple’s guid­ance for the all-im­por­tant hol­i­day quar­ter is ex­tremely strong, with a range of be­tween $84bn and $87bn. That would set an all-time record that eclipses last year’s $78.4bn, which in­cluded an ex­tra week of sales that won’t be in­cluded in the up­com­ing quar­ter. And keep in mind that Ap­ple is ex­tremely con­ser­va­tive with its guid­ance, so rev­enue could eas­ily top $90bn.

The fourth quar­ter also rep­re­sented Ap­ple’s best for Ser­vices, which in­cludes Ap­ple Mu­sic, App Store sales, and Ap­ple Pay. And its ‘Other’ cat­e­gory, which con­tains Ap­ple Watch and Ap­ple TV sales, was up more than 36 per­cent over the same quar­ter last year. In the earn­ing call, Tim Cook said Ap­ple Watch sales were up more than 50 per­cent for the third con­sec­u­tive quar­ter.

Ap­ple an­nounced its earn­ings on the eve of the iPhone X launch, and its hol­i­day guid­ance sug­gests it ex­pects to sell a whole lot of the new hand­set. Sup­plies are ex­tremely con­strained, but Ap­ple clearly ex­pects that to al­le­vi­ate as the hol­i­day shop­ping sea­son com­mences. Last year Ap­ple sold 78.3 mil­lion iPhones,

but the guid­ance here would likely mean iPhone sales top 80 mil­lion this hol­i­day sea­son. During the call, Cook vaguely said Ap­ple “is go­ing to get as many of them to cus­tomers as soon as pos­si­ble”.

Ad­di­tion­ally, he had this to say about Ap­ple’s strong earn­ings: “With fan­tas­tic new prod­ucts in­clud­ing iPhone 8 and iPhone 8 Plus, Ap­ple Watch Se­ries 3, and Ap­ple TV 4K join­ing our prod­uct line-up, we’re look­ing for­ward to a great hol­i­day sea­son, and with the launch of iPhone X get­ting un­der­way right now, we couldn’t be more ex­cited as we be­gin to de­liver our vi­sion for the fu­ture with this stun­ning de­vice.”

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