Thursday 30 July 2020 9:44 pm

Strong iPhone sales power Apple past expectations

Sales of Apple’s hallmark iPhone surpassed analyst expectations by $4bn in its fiscal third quarter, pushing the tech firm to report revenue gains in every product category and geography.

With 60 per cent of its smartphone sales coming from international markets, the California-headquartered tech giant posted iPhone revenues of $26.42bn, leapfrogging analyst expectations of $22.37bn.

Overall Apple’s third-quarter revenue and profit were $59.69bn and $2.58 per share, compared with analyst expectations of $52.25bn and $2.04 per share.

Its shares reached an all-time high in after-market trading, rising more than four per cent to cross the $400 per share mark.

Apple also announced a 4 to 1 stock split — meaning each Apple shareholder of record at the close of business on 24 August this year will receive three additional shares for every share held on the record date.

Read more: Apple shares sink on US deceptive practices probe report

Sales in its services segment, which also includes offerings such as iCloud and Apple Music, rose 14.8 per cent to $13.16bn. This was compared with $11.46bn a year ago, and analyst expectations of $13.18bn.

Its chief executive Tim Cook told Reuters that Apple now has 550m paying subscribers on its platform, up from 515m in the previous quarter.

Meanwhile sales in its growing wearables segment, which includes the Apple Watch and its popular Airpods, rose 16.7 per cent to $6.45bn. This was compared with $5.53 bn a year ago and estimates of $6bn.

However the company declined to give a fourth-quarter forecast, as the coronavirus pandemic leaves some retailers with cause for concern on consumer spending ability.

The US economy reported its worst performance since the Great Depression earlier today, as GDP collapsed at a 32.9 per cent annualised rate last quarter.

Read more: US economy shrinks by record 33 per cent amid coronavirus pandemic

The company saw strong sales in its greater China region, where aggressive pricing during a June holiday shopping season and lower-priced iPhone SE model released in April helped boost sales by two per cent to $9.33bn.

Cook said the release of the iPhone SE put Apple in a stronger position during a pandemic-ravaged quarter.

“I think the economic stimulus that was in place — and I’m not just focused on the US, but more broadly — was a help,” he added.