Apple stocks soar just shy of $1 Trillion market cap as revenue hits $53.3 Billion in Q3 earnings 2018

Apple announced its financial earnings for fiscal 2018 third quarter yesterday. The Company hit revenue of $53.3 billion, seeing an increase of 17 percent from the last year’s quarter revenue of $45.4 billion, making it company’s seventh consecutive quarter of “accelerating growth”.

Also, Apple generated earnings per share of $2.34, which is an increase of 40% from last year. These values beat analysts expectations of $52.31 billion in revenue and $2.18 earnings per share.

As you can tell from the chart below, its stock has reached an all-time high of $190.29.

 Apple stock report

Over the earnings call, Tim Cook, CEO of Apple said: “We’re thrilled to report Apple’s best June quarter ever, and our fourth consecutive quarter of double-digit revenue growth”. He also added that “Our Q3 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’s other financial highlights of Q3 2018:

Here are the figures, as reported by Luca Maestri:

• Net income is $11.5 billion this quarter which is up $2.8 billion, or 32% up as compared to last year.
• Diluted earnings per share were $2.34 which is up 40% from last year’s $1.67.
• Cash flow from operations is $14.5 billion, a high from last year’s $12.5 billion.
• iPhone revenue was 20% year over year, with iPhone ASP increasing to $724 from $606 a year ago. During the quarter, 41.3 million iPhones got sold with double-digit unit growth in several mature markets.
• Services hit an all-time record revenue of $9.5 billion dollars, a 31% higher than last year’s $7 billion.
• Macs hit double-digit year over year growth with nearly 60% of purchases during the quarter coming from customers who are new to Mac.
• Wearables ( Apple Watch, AirPods, Beats ) revenue exceeded $10 billion over the last four quarters, a remarkable accomplishment for a set of products that have only recently entered the market.
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  Apple data summary

Among these, the top three highlights for the company this quarter, as mentioned by Tim, are iPhone revenue, services revenue, and Wearables revenue.

According to Tim,“iPhone had a very strong quarter --  active installed base grew by double digits, driven by switchers, first-time smartphone buyers, and our existing customers -- iPhone X was the most popular iPhone in the quarter -- with a customer satisfaction score of 98%”.

Now, talking about services, paid subscriptions from Apple and third parties have surpassed 300 million which is an increase of more than 60% last year. Revenue from subscriptions played an important role in increasing the percentage of its overall services business. With almost 30,000 apps available in the app store now, the number of apps offering subscriptions also continue to grow. Other services such as Apple music, cloud services, Apple pay, Apple News, Facetime calls are also going strong these days.

And third highlight, Wearables revenue “was up over 60% year over year with growth accelerating from the March quarter”.

Other than that, Apple had organized a developers conference in June which included a preview of major advances coming soon to Apple’s four operating systems: iOS, macOS, watchOS, and tvOS. Tim said over the call that “Developer and customer reaction has been very positive -- we have over 4 million users participating in our new OS beta programs”.

Apple’s guidance for its upcoming September Q4 2018

Following are the guidance figures as reported by Luca Maestri:

• Expected Revenue: Between $60 billion to $62 billion
• Expected gross margin: between 38 percent and 38.5 percent
• Expected operating expenses: between $7.95 billion and $8.05 billion
• Other income/(expense): $300 million
• Tax rate: approximately 15% before discrete items

Apple is constantly taking initiatives to make sure that its current state continues to grow. In fact, major additions are being made to iOS 12 as Tim mentioned that “Siri will take a major step forward with Siri shortcuts which will deliver a new, much faster way to get things done and allow any app to work with Siri”. Other features like Activity Reports and Screen Time in iOS 12 will enable parents to monitor their children's activity from their own iOS devices.

With macOS Mojave, new apps like News, Stocks, Voice Memos, and Home will be available on the Mac for the first time.

He also added that “Developers will be able to build even more intelligent apps -- using the power of machine learning with CoreML and CreateML. With ARKit 2, iOS 12 will provide an even more powerful platform to make dynamic AR apps, integrating shared and persistent AR experiences, object detection, and image tracking”.

The earnings result speaks highly of how Apple’s strategies and efforts have worked for them. Apple’s current market capitalization is worth $956.48 billion, which makes the tech giant only 7% away from becoming the first trillion-dollar company.

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