Services fuel Apple to historic June quarter

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Big pile of cash underneath an Apple logo.
Apple shares are trading up on the good news.
Photo: Ste Smith/Cult of Mac

Record-breaking revenue put Apple right in line with Wall Street expectations as the company released its Q3 2019 earnings report today.

The iPhone-maker brought in $53.8 billion in revenue, a number within range of its own guidance and most analysts’ predictions. That set a new record for Apple third-quarter revenue — a slight gain from Q3 2018’s $53.3 billion. CEO Tim Cook touted the company’s subscription offerings for fueling the new all-time high.

“This was our biggest June quarter ever — driven by all-time record revenue from Services, accelerating growth from Wearables, strong performance from iPad and Mac and significant improvement in iPhone trends,” said Tim Cook in a statement ahead of Tuesday’s earnings call. “These results are promising across all our geographic segments, and we’re confident about what’s ahead. The balance of calendar 2019 will be an exciting period, with major launches on all of our platforms, new services and several new products.”

With iPhone sales plateauing, Cook focused the company on boosting services to make up for revenue shortfalls. The latest Apple earnings indicate that plan just might work.

Apple reports best June quarter ever

Ahead of the report, analysts eagerly awaited Apple’s guidance for Q4 2019. New iPhones could go on sale at the tail end of that quarter.

Currently, Apple predicts it will make between $61 billion and $64 billion in Q4 2019. That falls in line with most analyst expectations.

Breaking down Apple’s revenue by category, the iPhone brought in $26 billion. That came in below Wall Street expectations of $26.5 billion, according to Yahoo Finance. This also marked the first time since 2012 that iPhone quarterly sales fell below 50% of total Apple revenue.

Services brought in $11.5 billion, also falling short of Wall Street’s prediction of $11.9 billion. Mac sales hit $5.8 billion. iPad made $5 billion and wearables secured $5.8 billion for the company.

“Our year-over-year business performance improved compared to the March quarter and drove strong operating cash flow of $11.6 billion,” said Luca Maestri, Apple’s CFO. “We returned over $21 billion to shareholders during the quarter, including $17 billion through open market repurchases of almost 88 million Apple shares, and $3.6 billion in dividends and equivalents.”