- Apple’s fiscal third-quarter earnings beat Wall Street expectations as revenue hit $109.4 billion and earnings reached $2.02 per share, its strongest June quarter to date.
- Services slid down slightly from last quarter’s all-time revenue record with $30.70 billion, but still rose 12% from last year to reach a June quarter milestone.
- Apple shares slipped 8% in after-hours trading two days after the company’s market cap crossed the $5 trillion mark.
When outgoing Apple CEO Tim Cook took the reins in 2011, the company was all about iPhones and iPads. Now, as he begins his farewell tour on a final earnings conference call, he gave a shoutout to new Apple TV series “Widow’s Bay” for its Emmy nods.
My, how things have changed.
As incoming CEO John Ternus prepares to takes the reins from Cook, with Ternus’ first day as the new leader set for Sept. 1, Cook said the transition “is going seamlessly.”
With Ternus set to run Apple’s earnings calls starting next quarter, he only chimed in when asked by an analyst about his general approach to taking over. “There is so much opportunity for us with everything that’s happening in this space, and we’re just really focused on on our plans and very excited about it,” Ternus said.
While Cook spoke about Apple TV only briefly during Thursday’s earnings call, when he did, he zeroed in on the streamer’s prestige series and awards accolades, including Apple’s milestone of scoring Tony, Emmy, Oscar and Grammy wins faster than any streamer in history. He also touted the streamer’s Emmy nominations, pointing to its record 89 nominations, including those for “Widows Bay,” which he noted “stands out as the year’s most nominated new program, earning 19 Emmy nominations.”
“Apple TV continues to leave audiences spellbound with new releases like ‘Widow’s Bay’ and ‘Cape Fear,’ alongside returning favorites like ‘Silo’ and ‘Sugar,’” Cook said. “And next week, we’re excited that ‘Ted Lasso’ is back for its fourth season.”
Apple TV is a growing contributor to the tech giant’s services business, which is the second largest business behind the iPhone. In the period, that segment, which includes Apple TV, Apple Music, iCloud, its App Store and more, saw a 12% rise with the quarter hitting $30.74 billion.
Driving the company’s revenue was, once again, the iPhone, which saw a 22% year-over-year rise over a year ago.
Some things stay the same.
A record-breaking June
Apple’s third-quarter revenue of $109.4 billion and per-share earnings of $2.02 rising past analyst estimates, with Wall Street’s projecting revenue of $108.96 billion and earnings of $1.89 per share.
Overall, revenue was up 16% year-over-year and earnings per share rose 29% over last year. Net income was $29.8 billion, compared to $23.4 billion a year ago. Apple notably benefitted from tariff refunds, which led to a boost of two percentage points for company gross margin and 11 cent rise boost to earnings per share.
Apple shares slipped 8% in after-hours trading two days after the company’s market cap crossed the $5 trillion mark.
Doubling down on AI
Cook was particularly bullish on the next iteration of Siri AI, which he noted had “great reception” at Apple’s annual Worldwide Developers Conference (WWDC).
“I think it’s a very big idea to have AI that’s private, that’s based on your personal context, and that’s integrated across the the operating system, and so we couldn’t be happier with how things are going,” Cook said.
iPhone milestones
iPhone sales also soared 22% from last year with $54.3 billion in sales, with Cook touting the category “achieved June quarter records in every geographic segment and set a June quarter record for upgraders.”
“This is the most powerful and most popular iPhone lineup we’ve ever had,” Cook said on the earnings call. “More people are relying on iPhone every day for AI, powered by the outstanding performance of A19 and A19 Pro. Across the lineup, iPhone continues to deliver the performance, battery life, durability, and camera capabilities that people count on every day.”
