Thu, Aug 02, 2018 - Page 10 News List

Apple shares jump on positive outlook

CONFIDENCE BOOST:Investors expect the vast majority of Apple’s product lineup to be refreshed during the next couple of quarters, Shannon Cross of Cross Research said

Bloomberg

Apple Inc shares jumped 4 percent in extended trading on Tuesday after the company projected sales suggesting consumers are continuing to snap up the company’s high-end iPhones even as updated models are on the horizon.

The Cupertino, California-based technology giant projected fiscal fourth-quarter revenue of between US$60 billion and US$62 billion.

“The guidance will increase investor confidence,” Shannon Cross of Cross Research wrote in a note. “We expect the vast majority of Apple’s product lineup to be refreshed during the next couple of quarters, which should support near-term results.”

More than a decade after its debut, the iPhone is still Apple’s most important product, accounting for about 60 percent of revenue.

While unit sales have slowed, the company is building digital services and a suite of other gadgets around the device.

Those newer businesses, along with higher iPhone prices, have supported revenue growth.

The company is expected to launch three new smartphones later this year.

That has raised Wall Street expectations for more sales and profit.

The 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,” Apple chief executive officer Tim Cook said in a statement.

Fiscal third-quarter sales rose 17 percent to US$53.3 billion, Apple said.

Profit came in at US$2.34 per share.

The company sold 41.3 million iPhones in its third quarter, generating revenue of US$29.9 billion. That was driven by a higher average selling price of US$724, thanks in part to the iPhone X, which starts at US$999.

During a conference call with analysts, Cook said the iPhone X was the most popular iPhone in the fiscal third quarter, gaining market share around the world.

Apple reported record services revenue of US$9.55 billion, up 31 percent from a year earlier.

The category includes the App Store, Apple Music, iCloud storage and Apple Pay.

The company is working on expanding these offerings with original videos and a news subscription service.

Apple is on track to meet a goal of doubling services revenue by 2020, Cook said.

Paid subscriptions have passed 300 million, he added.

Apple said its gross profit margin would be 38 to 38.5 percent in the fiscal fourth quarter, versus analysts’ estimates of 38.2 percent.

The company’s other products segment continued to see strong growth, with revenue up 37 percent to US$3.7 billion. The category includes AirPods headphones, the Apple Watch, Apple TV and the HomePod.

Wearables were a highlight of the quarter, with sales up 60 percent year-on-year, Cook said.

The Apple Watch had a record quarter with mid-40 percent growth, he added.

The company does not report sales figures for the Apple Watch.

Apple said it sold 11.6 million iPads in the quarter, up from 11.4 million a year earlier.

In March, Apple launched an updated US$329 iPad geared toward students.

It is also working on an upgraded Pro model.

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