Shares of Apple Reach Record High on Strong Sales of iPhone
On Tuesday, Apple Inc. delivered strong fiscal earnings for its fiscal third quarter and signaled that its soon to be launched 10th anniversary handset lineup was on schedule. That helped drive stock in the Cupertino, California based tech giant up 6% to a high of all-time in trading afterhours.
The stock reached an intraday record of $159.10 following the release by Apple of better than had been expected sales for its iPhone, revenue and per share earnings. The stock price of Apple is expected to help push the Dow Jones to 22,000 on Wednesday.
Apple said as well that it reached a milestone of 1.2 billion iPhones sold.
The quarter from April through June is traditionally soft for Apple as the tech market waits in anticipation for the launch in September of the new models of iPhones.
However, the results on Tuesday showed that iPhone buyers might not be as inclined as they were at one time to hold off purchases until new models are released.
The product line for its iPad also showed surprising strength, service revenue kept growing at a strong rate, and even the Apple Watch, which has been much maligned, showed a sales increase of 50%.
Apple is expected to adopt OLED displays that are higher resolution for its 10th anniversary iPhone, as well as better technology for its touchscreen and advanced wireless charging. The new phone could cost as much as $1,000. The phone should launch during September.
The company forecast total revenue of $49 billion to $52 billion for its ongoing quarter, while analysts were expecting $49.2 billion.
The fiscal fourth quarter for Apple usually includes sales for the first weekend of the tech giant’s latest devices.
Apple said sales of its iPhone increased 1.6% to just over 41.03 million during its third quarter that ended July 1, which was higher than analysts’ estimates of 40.6 million. During the same quarter one year ago, Apple sold 40.4 million units.
However, a lower average sales price for the iPhone of $605, far below the expectations on Wall Street of $621, caused revenue from the iPhone to be $24.8 billion, less than Wall Street’s $25.5 billion estimate.
Apple’s CFO Luca Maestri said that a weak price was explained in part by Apple reducing the flow of its inventory by over 3.3 million units that were all at the high-end of the iPhone’s range.
Apple reports the number of phones that it sells to phone retailers and not the number of phones sold to consumers.