iPhone rebound boosts Apple
‘Dynamite’ quarter beats estimates, helps end losing streak
The streak is over.
Spurred by strong iPhone 7 and iPhone 7 Plus holiday sales, the Cupertino, Calif.-based company reported first-quarter earnings rose to $3.36 per share on record revenue of $78.4 billion, up 3%, besting Wall Street analysts’ estimates.
The results snapped a string of three consecutive quarters of declining iPhone shipments, which contributed to its first fiscalyear sales drop in more than a decade. The results sent shares up 3.5% in after-hours trading. Analysts had forecast earnings of $3.22 per share on sales of $77.3 billion, S&P Global Market Intelligence said. Net income fell 3% to $17.9 billion. Apple CEO Tim Cook told CNBC it was a “dynamite” quarter.
A rebound in sales of Apple’s flagship product, the iPhone, contributed mightily to the financial reversal. Apple shipped 78.3 million iPhones, and consumer demand for the higher-priced iPhone 7 Plus added to its top line. Market researcher Factset had predicted sales of 78 million, up from 74.8 million in the same quarter a year ago.
Apple Services had as much to do with the record quarter as iPhone, soaring 18% to $7.2 billion. “It is driving overall revenue growth and will continue to for the next few years,” says Bill Kreher, a technology analyst at Edward Jones. “It reduces the pressure of Apple creating hit products every few years.”
The rally could be short-lived: Apple gave ho-hum guidance of revenue of $51.5 million to $53.5 million in its current quarter.
Apple reported a cash pile of $246.1 billion, most of it overseas. Should President Trump make good on his vow to allow companies to return offshore profits without onerous taxes, it would be “very good for the country and very good for Apple,” Cook said.