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Services growth boosts Apple’s July-Sept profit

 

NEW YORK: Apple on Wednesday (Thursday in Manila) reported stronger-than-expected profits in the past quarter, fueled by growth in digital services and wearables that helped offset slower iPhone sales.

Profit in the quarter ending in September dipped four percent from a year ago to $13.7 billion, while revenues edged up two percent to $64 billion.

Apple, set to launch a new streaming television service this week, saw strong revenue gains in its services segment, which includes music, digital payments and software and in its segment for wearables and accessories that includes its Home Pod, Apple Watch and ear buds.


Chief Executive Tim Cook said Apple saw its best-ever revenue gains for the fiscal fourth quarter period.

“There were no blemishes in the quarter with Cook & Co. delivering a masterpiece quarter despite its back against the wall with the company the poster child of the US/China trade battle,” Wedbush analyst Dan Ives said in a note to investors.

Apple shares rose some two percent in after-hours trade following the release.

Cook hailed the results as “the conclusion of a remarkable fiscal 2019 for Apple,” and said the company “established new all-time highs for multiple services categories.”

iPhone sales down

Apple, which has ceased reporting unit sales of iPhones, said revenue from its smartphones fell nine percent in the quarter to $33.4 billion.

Services accounted for 20 percent of revenues, according to Chief Financial Officer Luca
Maestri, with 18 percent growth in the segment to $12.5 billion.

The wearables and accessories category produced revenue growth of 54 percent to $6.5 billion, led by gains in sales of Apple Watch and the wearable Air Pods.

Apple saw modest sales declines in its “greater China” region and in Europe and Japan, but this was offset by gains in North America and elsewhere in Asia.

“Importantly on the iPhone front, China came in well above our and [S]treet expectations and is on the path to showing growth in the region,” Ives said.

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Today’s Front Page February 18, 2020

Today’s Front Page February 18, 2020