Apple: waiting for September’s launch, strong Q3 sales

8 years ago - Published in Finance, Fundamental Analysis

Apple announced on Tuesday financial results for the third fiscal quarter of 2017, which corresponds to the second calendar quarter of the year. For the quarter, Apple posted revenue of $45.4 billion and net quarterly profit of $8.7 billion, or $1.67 per diluted share, compared to revenue of $42.4 billion and net quarterly profit of $7.8 billion, or $1.42 per diluted share, in the year-ago quarter.

The results show that iPhone buyers may be less inclined than they once were to delay purchases until a new model is out. 

The iPad product lines also showed unexpected strength, service revenue continues to grow at a healthy clip, and even the much-maligned Apple Watch showed a 50 percent sales increase.

Apple is widely tipped to adopt higher-resolution OLED displays for the latest iPhone, along with better touchscreen technology and wireless charging – which could come with a $1,000 plus price tag.

Although CEO Tim Cook had warned that iPhone sales might see a "pause" ahead of the expected September launch of the new iPhone, iPhone unit sales were in line with Wall Street expectations and in line with last year's performance.

The company said iPhone sales rose 1.6 percent to 41.03 million in the third quarter ended July 1, above analysts' average estimate of 40.7 million units, according to FactSet StreetAccount. Apple sold 40.4 million iPhones a year earlier.

China was the lone blot on an otherwise stellar quarter, with revenue in the region dropping 10 percent year over year. CEO Tim Cook addressed the seemingly weak performance during an investor conference call, saying mainland China was actually flat year-over-year and up 6 percent on a constant currency basis. 

The next-generation flagship smartphone has been all but confirmed by code discovered in an errant release of HomePod firmware. Analysis of the software this week revealed what appears to be a representation of "iPhone 8's" final design, confirmation of facial recognition features, screen specifications, potential tap to wake functionality and more.