Apple surprises with strong iPhone sales, record Q2 revenue

Apple surprises with strong iPhone sales, record Q2 revenue

The company, flush with a huge cash pile on strong earnings boosted by the United States tax cut plan of 2017, also announced a 16% boost to its quarterly dividend. Celebrated Apple analyst Ming-Chi Kuo shocked many in January by saying that the company would cease production of the tenth anniversary model by the middle of this year.

No company benefited more from the tax break on overseas cash than Apple, which had accumulated more than $250 billion outside the US during the past decade, thanks to the huge popularity of the iPhone and other products.

The report suggested that the sales of iPhone have increased by three percent as compared to the what Apple collected during the same time previous year. Tim Cook told investors that customers chose the anniversary iPhone "more than any other iPhone each week in the March quarter", similar to what they did in December quarter. In the services department, the company reported $9.19 billion during the quarter, higher than the $8.39 billion that Wall Street was expecting.

Taking into account of iPhone's revenue contribution and the iPhone ASP, Apple could achieve a 10 percent year-on-year growth in iPhone shipments in the current quarter with around 45 million units shipped.

Apple's quarterly profit has beaten market expectations - though the 52.2 million iPhones it sold was slightly less than anticipated as global demand for smartphones wanes.

Still, that doesn't mean Apple's iPhone sales will start soaring again. Apple receives 30 percent of the price of one-time app purchases and purchases made within apps, such as items in video games, and 15 percent of App Store subscriptions to services like Netflix Inc after a year.

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San Francisco: Apple Inc.'s results confirmed that, while the days of double-digit smartphone industry growth are over, chief executive officer Tim Cook has a plan to withstand the slowdown.

"We also grew revenue in all of our geographic segments, with over 20% growth in Greater China and Japan". Citigroup reiterated a "focus list" rating and issued a $142.20 price target (up from $100.00) on shares of Apple in a research report on Wednesday.

Apple's growth story is gradually shifting from hardware sales to its services business as the company builds out the iPhone platform with app sales, music streaming subscriptions, cloud storage and mobile payments. "While investors will always have some anxiety regarding the quarterly iPhone number, the results and guidance suggest we've entered a period of greater visibility in the iPhone business".

Along with the stock price, Apple options volume is surging, with around 225,00 calls and 161,000 puts on the tape so far - five times the expected intraday pace. The shares were sold at an average price of $166.42, for a total transaction of $11,564,692.22. Apple's services business brought in a healthy $9.2 billion revenue in the March quarter, up 31% YoY. "I think the smartphone market is sort of the best market for a consumer product company in the history of the world". Wall Street expected $60.8 billion.

"I don't buy the view that the market is saturated", Cook said.

An Apple logo is seen on the building's facade.

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