Apple tops March quarter expectations

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iPhone sales are down but overall, Apple has exceeded expectations.

Apple has posted better earnings and revenue than Wall Street expected for the March quarter even as sales of its flagship iPhones were $US6.5 billion ($A9.2 billion) lighter in the period, down 17 per cent.

For the quarter ended March 30 – Apple’s fiscal year 2019 second quarter – the company reported revenue of $US58.0 billion, down 5 per cent from the year-ago quarter, and earnings per diluted share of $2.46, down 10 per cent.

Wall Street analysts’ consensus estimates had projected Apple to report revenue of $US57.37 billion and EPS of $2.36. Apple’s stock rose over 5 per cent in after-hours trading.

While iPhone revenue fell, to $US31.05 billion, Apple’s Services segment – which includes the App Store, Apple Music, iCloud, Apple Care and Apple Pay – generated quarterly record revenue of $US11.5 billion, up 16 per cent.

According to CEO Tim Cook, Apple had 390 million paid subscriptions at the end of March, up 30 million in the last quarter.

Other bright spots: Revenue in the company’s Wearables, Home and Accessories segment jumped 30 per cent, to $US5.13 billion and iPad sales hit a six-year high of $US4.87 billion (up 22 per cent year over year).

As in the 2018 holiday quarter, Apple’s sales in Greater China declined, dropping 21 per cent year-over-year, to $US10.22 billion. The tech giant had warned of weaker sales in China earlier this year.

“Our March quarter results show the continued strength of our installed base of over 1.4 billion active devices, as we set an all-time record for Services, and the strong momentum of our Wearables, Home and Accessories category, which set a new March quarter record,” Cook said.

For the June 2019 quarter, Apple expects revenue between $US52.5 billion and $US54.5 billion – down 11-14 per cent compared with $US61.1 billion in the year-earlier period.

As iPhone sales have slowed, Apple is looking for new growth areas, including from its new foray into the entertainment biz.

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