These are the most important numbers from the report compared to analysts’ prior estimates as compiled by Bloomberg.
Revenue: $64 billion versus $63.01 billion expected
Earnings per share: $3.03 versus $2.83 expected
iPhone revenue: $33.36 billion versus $32.25 billion expected
Services revenue: $12.51 billion versus $12.16 billion expected
Q1 gross margin forecasts are also higher than expected, with margin expected to come in at 37.5% to 38.5%. Analysts’ had expected margins to be 37.6%, according to estimates by Bloomberg. Q1 revenue is also on track to be higher than initial expectations, with Apple providing guidance of $85.5 billion to $89.5 billion. Expectations had been for $86.5 billion for the quarter.
The company’s stock was up more than 3% after the report was issued.
On September 10, Apple unveiled its new line of flagship smartphone — which consists of the iPhone 11, iPhone 11 Pro, and iPhone 11 Pro Max.
And reaction to the lineup looks to be more positive than analysts initially believed. According to Wedbush's Dan Ives, demand for the iPhone 11 in China is tracking 15% to 20% above expectations, and U.S. consumers are also believed to be snapping up more of the units.
UBS analyst Timothy Arcuri also expects to see greater than expected iPhone 11 demand in the coming quarters, thanks to an improved trade-in program, the lower $699 price point for the base iPhone 11, and the fact that the iPhone 7, which has a large install base, is now three generations old.
As has been the narrative among analysts for some time, Apple's Services division is also in the spotlight, as the company's Apple TV+ is set to launch on Nov. 1.
Apple will be offering a free year of the service with every new piece of hardware it sells, which should ensure a quick uptick in subscribers. There's been concern, though, that by using hardware to move Apple TV+ services, Apple will cut into the margins on its more profitable devices.
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