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Even before the iPhone X hits the market, Apple continues to rake in the cash, beating analyst revenue estimates by nearly $2 billion — buoyed by better-than-expected iPhone sales — when it posted its fourth quarter earnings on Thursday.
The world’s biggest tech company reported revenue of $52.6 billion and earnings of $2.07 cents a share for the three months ended Sept. 30 — running past Wall Street estimates. Analysts anticipated Apple would post $50.7 billion in sales and earnings of $1.87 cents a share, according to Thomson Reuters data. Apple’s revenue increased 12 percent year-over-year.
“We’re happy to report a very strong finish to a great fiscal 2017, with record fourth quarter revenue, year-over-year growth for all our product categories, and our best quarter ever for Services,” said Apple CEO Tim Cook in a statement accompanying its earnings. “With fantastic new products including iPhone 8 and iPhone 8 Plus, Apple Watch Series 3, and Apple TV 4K joining our product lineup, we’re looking forward to a great holiday season, and with the launch of iPhone X getting underway right now, we couldn’t be more excited as we begin to deliver our vision for the future with this stunning device.”
Apple sold 46.7 million iPhones during the fourth quarter, passing analyst estimates of 46.1 million. Its Services business — encompassing iCloud, movie downloads, and Apple Care — hit $8.5 billion in revenue, a 34 percent jump year-over-year. Investors liked what they were seeing, as shares of Apple surged 3 percent in after-hours trading to a new all-time high of about $173 a share.
With the Nov. 3 release of the highly anticipated iPhone X — starting at a crisp $999 — Wall Street also had its eyes pinned on Apple’s Q1 forecast as well, expecting the company to share a mammoth $84.9 billion revenue forecast. Apple obliged, projecting it’ll pull in between $84-$87 billion next quarter.
It was an eventful yet unique quarter for Apple, as it debuted its slate of new products in Sept., as usual, but held off on launching its premier iPhone for months due to production delays. Apple fans eager for a new device had to subside on the iPhone 8 for now — which was met with tepid crowds when it debuted. The wait for the iPhone X has investors looking for a “super cycle” of phone upgrades during the upcoming quarter, as its facial recognition software and button-less screen sets it apart from previous models.
“We believe it is likely that initial demand for iPhone 8 is being negatively impacted by customers waiting for iPhone X,” said Piper Jaffray analyst Michael Olson in a client note shared with TheWrap. “We have factored this concern into our model by pushing more iPhone units out of the Sep/Dec quarters and into Mar/Jun.”
Still, even with more than half of its sales stemming from the iPhone, Apple isn’t a one-trick pony. Between the iPad, Mac sales, its services business, and the Apple Watch — which Cook recently said was the top-selling watch in the world — the company has been able to buy its time waiting for the full iPhone rollout. And with the Watch now being cell-enabled, analysts told TheWrap Apple will soon be selling more than the estimated 2-3 million it shelled out last quarter.
Apple started to dip its toes into the original content game as well during the fourth quarter. The company is putting $1 billion into shows during the year ahead, aiming for family-friendly content that plays to a wide audience. Its initial run of programming, including a spin-off version of James Corden’s “Carpool Karaoke,” has done little to turn heads. But for a company sitting on more than $250 billion in cash, there’s little stopping the Silicon Valley mainstay from going full-throttle in its chase for Hollywood stardom.
At the same time, Wall Street has kept its love affair going strong with Apple; in the last three months, the Cupertino, Calif.-based company gaining 8 percent and pushing its stock to an all-time high of about $168 a share as markets closed Thursday. Apple has charged up 44 percent since the beginning of 2017 — swelling its market cap to $867 billion as it pushes towards becoming the first trillion-dollar company.
The company will hold a conference call to discuss earnings at 5:00 p.m. ET.