Shares of Apple Inc. (NASDAQ: AAPL) surged in extended trading on Tuesday after the company reported earnings and revenue that were higher than expected. Most notably, Apple’s sales returned to growth following two straight down quarters, a sign that the company was slowly diversifying its revenue streams amid an ongoing iPhone slump.


Q3 Earnings Summary

  • Earnings: $2.18 per share
  • Revenue: $53.8 billion
  • iPhone Revenue: $25.99 billion
  • Service Revenue: $11.46 billion
iPhone sales account for more than 48.3% of company-wide revenue, the first time since 2012 the smartphone hasn’t contributed to over half of Apple’s revenue.

For the quarter ended June, Apple’s earnings fell 13% year-over-yer to $10.04 billion, the company reported Tuesday. Despite the drop, per-share earnings came in at $2.18, much higher than the $2.10 expected.

Revenues edged up 1% over year-ago levels, reaching $53.8 billion. Analysts were expecting $53.39 billion in sales.

While overall revenues grew, iPhone sales continued to slump. The smartphone generated $25.99 billion in sales, down 12% from the same quarter last year and below the $26.31 billion expected. On the opposite side of the ledger, services revenue jumped 13% to $11.46 billion but was slightly below expectations.

As per the latest numbers, iPhone sales account for more than 48.3% of company-wide revenue. As CNBC reports, that’s the first time since 2012 the smartphone hasn’t contributed to over half of Apple’s revenue.

Apple also outperformed in another critical market: China. Sales to the Greater China region, which includes Hong Kong and Taiwan, fell 4% to $9.61 billion. Last quarter, the company’s China sales plunged 22%. Tim Cook, Apple’s CEO, said China’s VAX tax cut was a big help.

The earnings call provided investors with upbeat guidance on the September quarter, where Apple said it expects to generate anywhere from $61 billion to $64 billion in revenue. Analysts were expecting guidance of $60.98 billion.


Apple Stock Surges After Hours

Apple’s stock price rose more than 4% in after hours trading, reaching a high of $217.60 a share. The stock fell 0.4% in regular hours to close at $208.78. Year-to-date, AAPL has gained more than 32%. That’s significantly higher than the Nasdaq Composite and S&P 500.

Apple Share Price YTD - Jul 31 2019

Source: Yahoo Finance

At current values, Apple’s market capitalization is just $40 billion shy of $1 trillion.

On the earnings call, the company said it doled out more than $17 billion on buybacks of almost 88 million shares during the quarter. It also paid out $3.6 billion in dividends and equivalents.



Apple appears to be emerging from its China-induced slowdown, as evidenced by the stronger than expected revenue numbers and its upbeat guidance. Its acquisition of Intel’s modem division earlier this month is part of a much wider strategy to control more of the primary technologies behind its core products.

Disclaimer: Author holds no investment position in Apple at the time of writing. 

The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Grizzle hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.