Apple shakes off iPhone slump to deliver strong quarterly results

SAN FRANCISCO (AP) — Apple is still running a well-oiled moneymaking machine despite cooling demand for its hottest product, the iPhone.

Sales and revenue in the July-September quarter exceeded Wall Street estimates as Apple’s newest iPhones got off to a better start than expected, even though the devices aren’t that much different from last year’s models.

Apple said on Wednesday that revenue rose two per cent from the same time last year to

USD64 billion, despite iPhone revenue dropping nine per cent. The company’s iPhone sales have now declined from the previous year for four straight quarter.

Apple’s quarterly profit dipped three per cent to USD13.7 billion, but its earnings per share of USD3.03 topped analyst projections.

File photo shows an Apple Store in Chicago. PHOTO: AP

In another encouraging sign for the company, Apple’s sales in China recover further from a sharp drop-off earlier this year. That helped ease worries that Apple might be bruised by President Donald Trump’s trade war with the world’s most populous country.

Apple also signalled its confidence that the momentum will continue in the current quarter, which spans the crucial holiday season. The Cupertino, California, company projects revenue will climb by about four per cent from the same time last year.

Part of that growth will likely come from a hotly anticipated video streaming service called Apple TV Plus. It’s scheduled to debut today to compete against industry pioneer Netflix and a slew of new entrants, including Disney Plus and HBO Max.

“You can tell from the guidance we are bullish,” Apple CEO Tim Cook told analysts during a Wednesday conference call.

Add it all up, and it becomes easier to see why the stock market’s sentiments about Apple have changed dramatically since the company warned earlier this year that iPhone sales were falling, especially in China. That flop coming out of last year’s holiday season made it clear that the iPhone was losing some of its luster, raising fears that Apple’s best days may have past.

Those worries hammered Apple’s stock, driving down the price to USD142 in early January.

But the stock has been setting new highs this month as investors began to realize Cook had crafted an effective strategy to counteract the waning demand for iPhones. The stock’s recovery translates to a nearly USD500 billion swing in fortune for Apple’s shareholders as the company’s market value has soared back to USD1.1 trillion — roughly the same level as its long-time rival, Microsoft.

Apple Inc shares gained nearly two per cent to USD247.77 in Wednesday’s extended trading after the company revealed its fiscal fourth-quarter financial report.