Apple earnings Q3 2019 - CNBC

Apple reported earnings for its June quarter on Tuesday that were above expectations, and the company's revenue returned to growth after two straight down quarters.

The stock rose more than 4% in after-hours trading.

Apple's guidance was strong and beat analyst expectations, suggesting that demand for Apple products is stabilizing headed into the critical second half of the year. Apple also declared a cash dividend of $0.77 per share. 

Here's how the company did versus what analysts were expecting:

• EPS: $2.18 vs. $2.10 estimated by Refinitiv consensus estimates.
• Revenue: $53.8 billion vs. $53.39B estimated by Refinitiv consensus estimates.
• Q4 Revenue guidance: $61 billion to $64 billion versus $60.98 billion estimate by Refinitiv consensus estimates.
• iPhone revenue: $25.99 billion vs. $26.31 billion estimated by FactSet.
• Services revenue: $11.46 billion vs. $11.61 billion estimated by FactSet. 

"We're very excited to report a return to growth for the quarter, and it's a record revenue for Q3 as well, best we've ever had," Apple CEO Tim Cook told CNBC's Josh Lipton.

Apple's revenue was up 1% from the year-ago quarter. Earnings per share were down 7%. 

"Great services quarter, unbelievable wearables quarter, significant progress on iPhone, and off-the-charts significant progress on China, compared to where we were the previous quarter," he continued.

Apple said that it had spent over $17 billion on share buybacks of almost 88 million Apple shares, and had also paid out $3.6 billion in dividends and equivalents during the quarter. 

Strong wearables and services growth

Apple's iPhone revenue was slightly lower than what analysts expected, partially offset by strength in the Mac and Wearables divisions. The iPhone accounted for 48.3% of Apple's overall revenue, the first time that it hasn't contributed over half of Apple's sales since 2012. 

Apple's wearables business includes Apple Watch, AirPods, and Beats headphones. In a statement, Apple CFO Luca Maestri said the product category was "accelerating."

Services revenue, which includes subscriptions, App Store fees, and other online services, grew by 13%, slightly under analyst expectations. Services margins were over 64%, contributing to Apple's bottom line. 

Cook said in a statement that Apple plans major launches for several new products in the second half of 2019. 

Critical Chinese market

Apple also outperformed expectations in China, which had been one of the main factors in disappointing quarters earlier this year. Cook said in an interview with CNBC that a Chinese VAT tax cut had been a big help, and that he saw no signs of a nationalistic boycott of Apple products in China.

"The VAT reduced from 16% to 13, that's clearly a big help. We took some price action, that's a big help. We introduced trade-in and financing, that's a big help. The more subjective thing is, when the countries are meeting and talking, that's better than not," Cook told CNBC. 

Apple said that it had $9.61 billion in sales in its Greater China category, which also includes Taiwan and Hong Kong. Cook said that Apple returned to growth in mainland China. 

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https://www.cnbc.com/2019/07/30/apple-earnings-q3-2019.html

2019-07-30 19:50:39Z
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