IPhone Sales Propels Apple to Record Quarter

Revenues and earnings per share of $3.89 (up 16 percent) both beat expectations. Apple posted a decrease of 1.24 percent.

Apple’s revenue for the final three months of 2017 – it’s first fiscal quarter – hit $88.3 billion, an 13% increase from the same period a year earlier and the highest on record. Even though revenues reached a record for a full quarter, the company seemingly confirmed some reports that the iPhone X failed to capture hearts and minds, with it reportedly slashing production in half.

During the earnings call, Apple’s Senior Vice President and Chief Financial Officer Luca Maestri was quoted as saying, “iPad sales grew strong double-digits in many emerging markets, including Latin America, the Middle East, Central and Eastern Europe and India, as well as developed markets, including Japan, Australia and Korea”.

Apple sold an estimated 77.3 million iPhones in Q1 2018, which is just over 1 percent less than the 78.3 million iPhones Apple sold during the same quarter previous year. That compared to an average iPhone price of $695 in the first quarter of a year ago. Investors can thank Apple’s higher average selling price for this sharp jump in iPhone revenue, since iPhone unit sales actually declined on a year-over-year basis.

Analysts have raised questions over consumer demand for new iPhones and whether Apple has become too reliant on its venerable device.

However, the company’s CEO Tim Cook said on Thursday in a conference call that iPhone X was constantly company’s top selling phone each week since it started shipping in November. He also revealed that the company soared past 1.3 billion devices in January, which means an increase of over 30 percent in just two years. In Q1 2018, Apple saw .5 billion in revenue for these other products, an increase of 36 percent year over year.

The company made an incredible $20.1 billion over the last three months, which works out at around £14 billion. “And with ARKit, we’re giving developers the most advanced tools on the market to create apps”, Cook said, though he declined to speculate on what Apple might do in the space in the future. Hargreaves does not have a price target but says that $178 is a “fair value”.

Bernstein reduced its rating for Apple to market perform from outperform due to the same reasons as KeyBanc.

Apart from this, IDC also presented a report for 2016 global market shipments.

Sacconaghi lowered his price target for Apple to $170 from $195.