Apple has announced the Q3 2019 financial results, and the company has ended the June quarter with a revenue of $53.8 billion, which is an increase from $53.2 billion in the same quarter a year ago.
The results beat Wall Street estimates and shares gained 3.5% to $216.10 in after-hours trading.
iPhones are no longer its biggest revenue driver, driving less than half its sales amid a global smartphone slump. The iPhone revenue was $25.99 billion, which was lesser compared to the $29.47 billion in revenue in the same quarter a year ago. This means that the iPhone now contributes less than half of Apple’s total revenue.
It is the services which are steadily growing for Apple, raking in $11.45 billion in revenue, an increase from $10.17 billion last year.
Wearables including the Apple Watch and AirPods as well as the Apple HomePod speaker and other accessories combined to rake in $5.52 billion in revenue, up from $3.73 billion at the same time last year.
Apple also earned more revenue from the Macs, clocking $5.82 billion in revenue, which is more than the $5.26 billion in Q3 last year. The iPad revenues also went up, clocking $5.02 billion in revenue, more than the $4.63 billion in the same quarter in 2018.
“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, Apple’s CEO.
“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.”
Revenue in Greater China was down 4 per cent from a year ago, to $9.2bn, compared with a 22 per cent decline in the prior quarter.
Luca Maestri, Apple’s CFO attributed the improvement to stimulus measures from Beijing, coupled with Apple’s tweaks to its offering in China. By making it easier to trade in old phones and finance new ones, and selling the second-hand phones at lower prices, the company had been able to increase the number of iPhone owners and keep consumers embedded in Apple’s services ecosystem.
“Even when iPhone revenue is declining, the install base is still growing,” he said. “It’s growing in every country in the world and more and more people are using the iPhone.”
“Our year-over-year business performance improved compared to the March quarter and drove strong operating cash flow of $11.6 billion,”
“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.”
Apple is providing the following guidance for its fiscal 2019 fourth quarter:
- revenue between $61 billion and $64 billion
- gross margin between 37.5 percent and 38.5 percent
- operating expenses between $8.7 billion and $8.8 billion
- other income/(expense) of $200 million
- tax rate of approximately 16.5 percent
Apple’s board of directors has declared a cash dividend of $0.77 per share of the Company’s common stock. The dividend is payable on August 15, 2019 to shareholders of record as of the close of business on August 12, 2019.