With Apple the last remaining hope to bring back some enthusiasm for the flagging FAANG/growth sector – and perhaps overall market – investors were focused on three key things that Apple would report in its earnings report today: i) whether the average selling price of its iPhone would remain above $700 (and continue rising), indicating continued demand for its top-end products; ii) whether Apple services would remain a source of continued strong growth even as iPhone unit sales appear to have plateaued in recent quarters, and iii) most importantly, Apple’s guidance for the all-important holiday quarter will be to gauge the success of the new iPhones and especially the lower-priced XR model.
With that in mind, here’s what Apple reported moments ago.
In the fourth fiscal quarter, Apple sold 46.9MM iPhones, well below analyst estimates of 48.4MM with iPad unit sales of 9.8 million also missing expectations, even as it beat on the bottom and top line, reporting Q3 EPS of $2.91, vs Exp. $2.78 on revenue of $62.9BN, and also beating expectations of $61.44BN. More good news from Tim Cook: the average selling price of its iPhones soared to $793, up from $618 a year ago, and smashing analyst expectations of $729.
But the main reason why the stock is sliding in after-hours trading is that Apple’s holiday quarter guidance was somewhat soft, at $89BN-$93BN, with the midpoint below the analyst estimate of $92.74BN.
A summary of key metrics from the fourth fiscal quarter:
