Apple surprises Wall Street with better-than-expected earnings

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iPhone
The iPhone is a money printing machine.
Photo: Jim Merithew

There’s a lot of good news in Apple’s second earnings report of 2018 that should keep investors happy going into the next quarter.

Revenue during Q2 2018 hit an all-time high for a March quarter at $61.1 billion, thanks in large part to 52.2 million iPhones sold. Apple CEO Tim Cook says iPhone X sales are still killing it, too.

“We’re thrilled to report our best March quarter ever, with strong revenue growth in iPhone, Services and Wearables,” said Cook in a press release published Tuesday. “Customers chose iPhone X more than any other iPhone each week in the March quarter, just as they did following its launch in the December quarter. We also grew revenue in all of our geographic segments, with over 20% growth in Greater China and Japan.”

Apple saw its revenues grow 16 percent from the year-ago quarter, bringing quarterly earnings per diluted share up 30 percent to $2.73. International sales accounted for 65 percent of the quarter’s revenue.

iPad sales fell to 9.1 million units for the quarter, while Mac sales declined ever so slightly to 4 million units. Meanwhile, revenue from Apple services — a sector that includes Apple Music, the App Store and other endeavors — rose to more than $9.1 billion.

Concerns about tanking sales in China, a key market for Apple, also seem overblown.

“We also grew revenue in all of our geographic segments, with over 20% growth in Greater China and Japan,” Cook said in the press release.

Apple guidance for Q3 2018

Apple expects to bring in revenues between $51.5 billion to $53.5 billion next quarter, indicating that it doesn’t expect iPhone sales to drop off anytime soon.

“Our business performed extremely well during the March quarter, as we grew earnings per share by 30 percent and generated over $15 billion in operating cash flow,” said Luca Maestri, Apple’s CFO. “With the greater flexibility we now have from access to our global cash, we can more efficiently invest in our US operations and work toward a more optimal capital structure. Given our confidence in Apple’s future, we are very happy to announce that our Board has approved a new $100 billion share repurchase authorization and a 16 percent increase in our quarterly dividend.”