Apple Jumps Higher on Earnings Beat Despite iPhone Sales Dropping

08:52 02/03/2019

Shares of tech giant Apple were climbing higher after the company reported its first quarter financial results. Earnings and revenue were both in line with expectations and the stock saw a gain of 6% in after-hours trading as a result.

For the first quarter, Apple reported earnings per share of $4.18, which was a penny higher than the $4.17 that was expected by Refinitiv consensus estimates. Revenue at $84.3 billion was also higher than the $83.97 billion that was forecast by Refinitiv consensus estimates.

While revenue beat expectations, it was still a year over year decline of 5% and was the first annual evenue decline during the holiday season for Apple since 2001.

iPhone sales for the quarter were $51.98 billion, lagging behind the $52.67 billion expected. iPhone services revenue however was a beat at $10.9 billion compared to a $10.87 billion expectation.

CNBC's Jim Cramer of "Mad Money" weighed in and said, "The issue for those who hate Apple? Sorry, guys. No more new ammunition."

"While it was disappointing to miss our revenue guidance, we manage Apple for the long term, and this quarter's results demonstrate that the underlying strength of our business runs deep and wide," said Apple CEO Tim Cook. "Our active installed base of devices reached an all-time high of 1.4 billion in the first quarter, growing in each of our geographic segments. That's a great testament to the satisfaction and loyalty of our customers, and it's driving our Services business to new records thanks to our large and fast-growing ecosystem."

"Our customers are holding on to their older iPhones a bit longer than in the past. When you paired this with the macroeconomic factors particularly in emerging markets, it resulted in iPhone revenue that was down 15 percent from last year," Cook also said.

"We're very happy not only with the growth but also the breadth of our services portfolio. Our revenue from services has grown from less than $8 billion in calendar [year] 2010 to over $41 billion in calendar [year] 2018," he added.

"For perspective, despite the challenging December quarter, our revenue from China grew slightly for the full calendar year," Cook explained. "Macroeconomic factors will come and go, but we see great upside on continuing to focus on the things that we can control."

Chief Financial Officer Luca Maestri also noted that Apple has 900 million installed iPhones in use around the world, and 1.4 billion total installed devices.

This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
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