Apple races to become the first trillion-dollar company after strong Q3 earningsAugust 1, 2018
Apple posted its third quarter earnings today with a revenue of $53.3 billion, surpassing its projection by $1 billion. It’s the strongest third quarter for the company ever, despite one that tends to slow on iPhone sales as consumers prepare for new smartphone announcements in the fall. The average selling price of the iPhone was $724, which was above analyst estimates of $693.
Apple’s expected revenue for fiscal Q4 is $60 to $62 billion, a 16 to 19 percent growth from this period last year. The strong forecast could suggest that multiple new hardware devices are coming in the fall; so far, rumors suggest that up to three new iPhone models could be announced, while consumers are also anticipating a new version of the iPad Pro and a redesigned Apple Watch. Last quarter, Apple CEO Tim Cook did not confirm a midrange iPhone X device, but he did comment that the company will “continue to provide different iPhones … for folks to meet their needs.”
Even without three new iPhones, however, the 2018 MacBook Pro with a third-generation keyboard was just released that will be part of next quarter’s revenue. Another thing to consider is that Apple also announced three iPhone models last year, but only the iPhone 8 and 8 Plus were accounted for in Q4 revenues since the iPhone X came out in November. (Apple’s fiscal Q4 ends on September 30th.)
Meanwhile, Mac sales have declined in sequential quarters after Apple all but confirmed that MacBooks with first and second-generation butterfly keyboards have a faulty design. Last month, it launched a repair program that extended its keyboard service program to cover up to four years since the original purchase date, though it will not be using third-generation components for this repair.
The biggest revenue jump continues to be within the services department (which includes Apple Music, iCloud, and Apple Care) with a 31 percent increase to a record $9.55 billion in revenue. After today’s announcements, Apple currently has a market cap of $935 billion. If stock continues to rise above 7 percent, Apple could become the first trillion-dollar company at a price of $203.46 per share.