Apple revenue up as iPhone X continues to ring up sales

Apple chief executive Tim Cook taking a wefie with a customer at an Apple Store in Chicago, Illinois, in March. Apple posted revenue for its March quarter of US$61.1 billion, up from US$52.9 billion last year.
Apple chief executive Tim Cook taking a wefie with a customer at an Apple Store in Chicago, Illinois, in March. Apple posted revenue for its March quarter of US$61.1 billion, up from US$52.9 billion last year.PHOTO: REUTERS

SAN FRANCISCO • Apple has reported resilient iPhone sales in the face of waning global demand and promised US$100 billion (S$133 billion) in additional stock buybacks, reassuring investors that its decade-old smartphone invention had life in it yet.

Apple's quarterly results on Tuesday topped Wall Street forecasts, which dropped ahead of the report on growing concern over the iPhone. The Cupertino, California-based company was also more optimistic about the current quarter than most financial analysts, driving shares up yesterday.

Suppliers around the globe had warned of smartphone weakness, playing into fears that the company known for popularising personal computers, tablets and smartphones had become too reliant on the iPhone.

Sales of 52.2 million iPhones against a Wall Street target of 52.3 million was a comfort and up from 50.7 million last year, according to data from Thomson Reuters I/B/E/S.

Apple bought US$23.5 billion of stock in the March quarter, and said it planned to hike its dividend 16 per cent, compared with a 10.5 per cent increase last year. Analysts believe the heavy emphasis on buybacks will bolster share prices.

The cash Apple earmarked for stock buybacks is about twice the US$50 billion market capitalisation of electric-car maker Tesla.

IT'S A WINNER

This is the first cycle that we've ever had where the top of the line iPhone model has also been the most popular. It's one of those things like when a team wins the Super Bowl, maybe you want them to win by a few more points. But it's a Super Bowl winner and that's how we feel about it.

APPLE CHIEF EXECUTIVE TIM COOK, on the iPhone X.

Apple posted revenue for its March quarter of US$61.1 billion, up from US$52.9 billion last year.

Average selling prices for iPhones were US$728, up more than 10 per cent from US$655 a year ago, suggesting Apple's iPhone X, which starts at US$999, has helped boost prices.

Analysts had feared the high price was muting demand for the iPhone X, but Apple chief executive Tim Cook said it was the most popular iPhone model every week in the March quarter.

"This is the first cycle that we've ever had where the top of the line iPhone model has also been the most popular," he said during the company's earnings call. "It's one of those things like when a team wins the Super Bowl, maybe you want them to win by a few more points. But it's a Super Bowl winner and that's how we feel about it."

Apple also predicted revenue of US$51.5 billion to US$53.5 billion in the June quarter, and the share repurchases in the March quarter drove Apple's cash net of debt down slightly to US$145 billion.

"We are returning the cash to investors as we have promised," chief financial officer Luca Maestri told Reuters in an interview.

Profits were US$2.73 per share, up from US$2.10 a year ago.

Apple's services business, which includes Apple Music, the App Store and iCloud, posted US$9.1 billion in revenue compared with expectations of US$8.3 billion. Heading into earnings, investors were hopeful that growth in that segment could help offset the cooling global smartphone market.

Greater China sales rose 21 per cent from a year earlier, Apple's best growth rate there in 10 quarters, to US$13 billion.

In recent months, Apple has been emphasising the size of its overall user base, which includes used iPhones, rather than focusing strictly on new device sales, a sign of the increasing importance of making money off users without selling them new hardware.

REUTERS

A version of this article appeared in the print edition of The Straits Times on May 03, 2018, with the headline 'Apple revenue up as iPhone X continues to ring up sales'. Print Edition | Subscribe