Apple released its third-quarter results for the fiscal year 2017, showing that Apple’s third-quarter net revenue was $ 45.408 billion, up from $ 42.358 billion from a year ago, according to a report released on Aug. 2. Apple net profit was $ 8.717 billion, up 12% from $ 7.796 billion in the same period last year. But, surprisingly, the revenue fell by 10% when compared to the previous year in China.
Apple Net Profit
Apple’s third-quarter revenue and earnings per share are more than Wall Street analysts had expected. The fourth quarter earnings outlook is also beyond the analyst expectations. Affected by this, Apple’s stock price rose sharply by more than 5%.
Earnings details
For the third quarter ended July 1, 2017, Apple’s net profit was $ 8.717 billion, up 12 percent from the same period last year; diluted earnings per share were $ 1.67, up from the same period last year. Apple’s third-quarter operating profit was 10.768 billion US dollars, higher than the same period last year’s 10.15 billion US dollars. Apple’s third-quarter net revenue was $ 45.408 billion, up from $ 42.358 billion in the same period last year, with international sales accounting for 61%. Apple’s third-quarter revenue and earnings per share are more than Wall Street analysts had expected. Thomson Reuters survey analysts had expected Apple’s third-quarter earnings per share of $ 1.57, revenue of $ 44.89 billion.
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Product sales
Apple sold a total of 4,292,000 Macs in the third quarter, up 1 percent from 4.252 million units in the same period last year; totaling 41.26 million iPhones, up 2 percent from 4039.9 million in the same period, slightly ahead of Wall Street analysts. Apple sold a total of 11.442 million iPad, compared to 99.5 million units in the same period last year, seeing an increase of 15%. Thomson Reuters survey analysts had expected Apple’s third quarter iPhone sales to be 41 million.
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By region
Apple’s third-quarter Americas sector revenue was 20.376 billion US dollars, compared with 17.663 billion US dollars last year, an increase of 13%. European sector revenue was 10.675 billion US dollars, compared with 9.643 billion US dollars last year, an increase of 11%. Greater China revenues were $ 8,040 million, down 10% from $ 8.848 billion in the same period last year. Japanese sector revenues were $ 3.64 billion, up 3% from $ 3.529 billion in the same period last year. Revenue in the Asia-Pacific region was $ 2,729 million, up 15% from $ 2.75 billion in the same period last year.
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By product
Apple’s third-quarter revenue from Mac was $ 5,592 million, up 7 percent from $ 5.239 billion in the same period last year. Revenue from the iPhone was $ 24.846 billion, up 3 percent from $ 24.048 billion in the same period last year. Revenue from the iPad was $ 4,969 million, up 2% from $ 4.876 billion in the same period last year. Revenue from services was $ 7,266 million, up 22% from $ 5.976 billion in the same period last year. Revenues from other products were $ 2,735 million, up 23% from $ 2.19 billion in the same period last year. For the third quarter ended July 1, 2017, Apple’s net profit was $ 8.717 billion, up 12 percent from the same period last year; diluted earnings per share were $ 1.67, up from the same period last year. The third quarter of fiscal 2010, Apple’s net profit of $ 7.796 billion, diluted earnings per share of $ 1.42. Apple’s third-quarter operating profit was 10.768 billion US dollars, higher than the same period last year’s 10.15 billion US dollars. Apple’s third-quarter net revenue was $ 45.408 billion, up from $ 42.358 billion in the same period last year, with international sales accounting for 61%. Apple’s third-quarter revenue and earnings per share are more than Wall Street analysts had expected. Thomson Reuters survey analysts had expected Apple’s third-quarter earnings per share of $ 1.57, revenue of $ 44.89 billion.
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Performance expectations
Apple made the following forecast for the fourth quarter: revenue of $ 49 billion to $ 52 billion; gross margin of 37.5% to 38%; operating expenses of $ 6.7 billion to $ 6.8 billion; other income (expenditure ) of $ 500 million; the tax rate is 25.5%. Apple’s fourth-quarter revenue forecast median of $ 50.5 billion, exceeding what analysts had expected. Thomson Reuters survey analysts on average expected Apple’s fourth quarter revenue of 49.18 billion US dollars.
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Capital return plan
The Apple Board of Directors announced that it will distribute a cash dividend of $ 0.57 per share to the company’s common shareholders, which will be issued to the registered shareholders between August 8, 2017, and August 11, 2017.
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Apple CEO Tim Cook said that Apple is pleased to announce quarterly revenue growth of 7%, the third consecutive quarter to witness accelerated growth. The service business quarterly revenue set a historical record. Apple hosted a very successful Global Developers Conference in June, and Apple is very excited about the progress that iOS, macOS, watchOS and tvOS will make in the fall. Apple’s chief financial officer, Luca Maestri, said that during this quarter, sales and revenue for all of Apple product categories have grown to drive 17% of earnings per share. Apple has also returned $ 11.7 billion to investors this quarter, bringing the total return of capital based on the existing plan close to $ 223 billion.
Change in stock price
Apple shares in the Nasdaq regular trading rose 1.32 US dollars, to close at 150.05 US dollars or 0.89%. In the subsequent after-hours trading, Apple’s stock price rose $ 8.14, to $ 158.19, or 5.42%. Over the past 52 weeks, Apple’s highest price was $ 156.65, the lowest price was $ 102.53.
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The boost in earning is said to come from higher than expected iPhone sales. Apple hit another major goal too. The Apple Services grew to the size of a Fortune 100 company.
“If you look at the products, we sold 41 million iPhones, but frankly it’s better than that because we also reduced channel inventories by 3.3 million. If you look across the world, we had several markets in Asia, in Latin America, and the Middle East which grew more than 25 percent year on year. If you look at [iPhone] 7 in the [iPhone] 7 Plus, we grew strong double-digit year on year compared to the 6S plus a year ago. So iPhone was terrific.”Apple CEO Tim Cook said.
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It is expected that iPhone 8 will perform even better. Let’s see how that affects Apple net profit.
