By Wendy Lee
Published 2:12 pm PDT, Tuesday, July 31, 2018
Photo: DON EMMERT;Don Emmert / AFP / Getty Images
Apple on Tuesday beat analyst estimates, reporting that net income rose 32 percent in the third quarter to $11.5 billion, boosted by increased sales of iPhones, wearable devices and services.
It was a sharp contrast from other tech companies, including Facebook and Netflix, whose latest earnings didn’t measure up to investor expectations. Apple shares rose about 3 percent to $195.95 in after-hours trading.
“Apple stock’s resilience during the poor results and subsequent sell-off of Netflix, Facebook and Twitter demonstrates faith in a company that has rarely disappointed investors,” said Haris Anwar, a senior analyst with the financial analysis site Investing.com.
Apple said sales in its third quarter increased 17 percent to $53.3 billion. That beat analyst estimates of $52.3 billion, according to Thomson Reuters. Sixty percent of the company’s sales came from countries outside the U.S., Apple said.
After the bell, Alphabet, Microsoft, Amazon, and Intel all reported earnings, and it was a good day to be a tech giant overall. Jason Abbruzzese, business reporter at Mashable, joined Cheddar to break down all the earnings and what these numbers mean for the four tech companies. Amazon beat expectations for both revenue and earnings per share. Earnings per share reported at $0.52 versus the expectation of $0.03. Revenue came in at $43.7 billion versus the estimate of $42.14 billion. The third quarter is always a spend-heavy time for the online retail giant as it preps for holiday sales and an increased staff. Alphabet, also just referred to as Google, beat on earnings as well. Earnings per share came out to $9.57 versus estimates of $8.33 and revenue came in at $27.77 billion above estimates of $27.20 billion. Investors had their eyes on aggregate paid clicks, which were up 47%. This metric is big when it comes to Google because of the revenue it derives from search advertisements. Microsoft also had a successful earnings report. Earnings per share came in above estimates at $0.84 versus an estimate of $0.72, and revenue was reported as $24.5 billion versus estimates of $23.56 billion. Products and cloud services for Microsoft revenue also rose 17% in the ongoing cloud race between Microsoft and Amazon. Amazon Web Spaces had a reported revenue of $1.17 billion versus $861 million this time last year. And finally, Intel also had their time in the sun reporting earnings as well. And just like their tech neighbors on this market day, Intel beat estimates. Their reported earnings per share came in at $1.01 versus expectations of $0.80 and revenue was reported at $16.10 billion versus an expectation of $15.73 billion. Their data center group business accounted for $4.9 billion in revenue, which marks a 7% increase from this time last year, and their Internet of things group business took home $849 million in revenue, up 23% from this time last year.
Media: Cheddar TV
The Cupertino company sold 41.3 million iPhones in the third quarter, flat from a year ago. The iPhone represents a large chunk of Apple’s sales, but the company has also diversified its revenue by expanding the types of services it sells. In the third quarter, the services category, which includes subscription-based Apple Music and AppleCare, rose 31 percent to $9.5 billion in sales.
Gene Munster, a managing partner with venture capital firm Loup Ventures, said one of the key takeaways from the quarter is that “the iPhone is becoming a stable business, performing more like software than hardware.” Munster said he believes there is still room for Apple to grow, as its stock price has not reflected other areas Apple is exploring, including original video content and health.
Apple will hold a webcast at 2 p.m. to discuss its earnings results.
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