After the markets closed today, tech giant Apple (AAPL) reported better-than-expected earnings results for the third quarter of fiscal 2019, which ended on June 29. Apple’s revenue grew 1.0% to $53.8 billion. The results came in ahead of analysts’ estimate of $53.4 billion.
Continued strength in Apple’s Services business and robust revenue from the “Wearables, Home and Accessories” segment drove the top line. Revenue from the iPhone, the company’s largest product category, declined 11.8% to about $26 billion. However, the decline wasn’t as steep as the 15% and 17.3% losses in Q1 and Q2, respectively.
Apple’s third-quarter earnings per share fell 6.8% to $2.18. But they beat analysts’ forecast of $2.10.
Apple stock was up 4.5% as of 5:06 PM ET today in the after-market session. The stock had fallen 0.4% during the usual trading hours. Rising concerns about the US-China trade war after Trump bashed China in some tweets today drove the fall.
Apple’s performance by category
Except for iPhones, Apple generated higher revenue across all its categories. Notably, Apple’s services revenue grew 12.6% in Q2. The Services business has been a key growth driver lately. It includes revenue from the company’s digital content stores, streaming services, AppleCare, and Apple Pay.
However, the growth rate in the Services business decelerated in the third quarter compared to 16.2% in Q2 and 19.1% in Q1.
Revenue from the Wearables, Home and Accessories segment surged 48%. Meanwhile, iPad revenue grew 8.4%, and Mac revenue grew 10.7% after declining in the second quarter.
Apple expects its fourth-quarter revenue in the range of $61 billion–$64 billion. Analysts had been expecting revenue of $61.0 billion for the fourth quarter of fiscal 2019, compared to $62.9 billion in fiscal 2018’s fourth quarter.
CEO Tim Cook was optimistic about the company’s prospects. Cook said today, “These results are promising across all our geographic segments, and we’re confident about what’s ahead. The balance of calendar 2019 will be an exciting period, with major launches on all of our platforms, new services, and several new products.”
As of July 30, Apple stock is up 32.4% year-to-date. The stock has outperformed the 20.1% rise in the S&P 500. For more analysis of Apple’s Q3 earnings, check out these five key takeaways.