Apple Earnings: Shares Gain 3% in After Hours

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Analysts were looking for 41.6 million iPhone units in the quarter, and an average selling price of US$699, according to estimates compiled by Bloomberg News.

However, this year the period was seen as a crucial test of the staying power of the iPhone X model, last year's overhauled device.

"Apple gave the Street and tech investors finally some good news" beating earnings forecasts and predicting the current quarter will be strong, GBH insights head of technology research Daniel Ives said in a note to investors.

Yet Apple fared far better than its rival, delivering $29.9 billion in iPhone revenue, of an overall $53.2 billion. In a note ahead of earnings, Andy Hargreaves of KeyBanc Capital Markets said that the "the risk of a direct impact from trade conflicts or increased nationalism among foreign consumers that damages global iPhone demand" might offset potential gains for Apple.

Strong revenue growth of 31% from Apple's services business, which includes the App store and Apple Pay, also boosted its performance.

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"We're thrilled to report Apple's best June quarter ever, and our fourth consecutive quarter of double-digit revenue growth", Cook said.

The company shipped 3.7 million Macs last quarter, down 13% on the year.

Apple posted third-quarter revenue of US$53.3 billion and profits of US$2.34 per share, compared with analyst estimates of US$52.3 billion and US$2.18 per share, respectively, according to Thomson Reuters I/B/E/S.

The company said it expects fourth-quarter revenue of between $60bn (£45.7bn) and $62bn (£47.2bn).

The company, based in Cupertino, California, said its average iPhone selling price hit $724 (£552), beating analysts' expectations of $694 (£529).

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Cook dismissed the need for record revenue during the call, saying that because the smartphone market is so vast, it doesn't matter if revenue dips or goes up 10%.

Cook told analysts that Apple is on track to meet a goal of doubling Services revenue by 2020. Buffett's company Berkshire Hathaway purchased nearly 75 million shares of Apple earlier this year.

Apple, which makes about 56 percent of its revenue from the iPhone, has had to deal with slowing sales growth for its biggest product.

Finally, while Cook expressed opposition to new trade tariffs between the U.S. and China, noting how they're anti-consumer, he said that Apple is continuing to see double digit growth in China along with other major markets.

Also drawing positive scrutiny are Apple's "other products" which includes AirPods earphones and HomePod speaker systems. Cook said wearables were a highlight of the quarter, with sales up 60 per cent year over year.

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