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Apple stock jumps after earnings beat

Daniel Howley
Technology Editor

Apple (AAPL) reported its Q3 2018 earnings Tuesday, posting $2.34 earnings per share on revenue of $53.3 billion. That beats analysts’ expectations of $2.18 earnings per share on revenue of $52.31 billion.

Apple’s stock was up over 4% on Wednesday just after the markets opened, hitting an all-time high of $198.3 per share.

In the quarter, Apple sold 41.3 million iPhones versus analysts’ expectations of 41.6 million handsets. Apple sold 41 million smartphones in the same quarter last year.

“I think the smartphone market is very healthy,” Apple CEO Tim Cook said during the company’s earnings call on Tuesday. “I actually think it’s the best market in the world to be in for someone who’s in the business we’re in.”

The average selling price of each iPhone was $724, beating expectations of $699, and higher than last year’s $606 ASP. The iPhone’s ASP is an important indicator of the kind of iPhones people bought in the quarter. A higher ASP means customers purchased more high-end handsets such as the iPhone 8 Plus and iPhone X, versus the iPhone 8 and prior generation models.

Apple’s increasingly important Services segment saw revenue of $9.5 billion, up 31% versus $7.2 billion during the same quarter last year. Apple’s services business, which includes iTunes, Apple Music and iCloud among others, has been growing for years and could become the company’s main revenue generator as iPhone sales plateau.

“Our active install base on iPhone grew double digits over last year during the quarter, and so we’re thrilled with that and you can see that carrying through to the services line,” Cook said.

Apple’s guidance for Q4 was between $60 billion and $62 billion in revenue, versus analysts’ expectations of $59.48 billion.

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Email Daniel Howley at dhowley@oath.com; follow him on Twitter at @DanielHowleyFollow Yahoo Finance on FacebookTwitterInstagram, and LinkedIn