Investing.com – Apple (NASDAQ:) reported earnings that topped expectations even as services growth missed expectations in the fiscal third quarter of the year.
The firm reported earnings per share of $2.18 on revenue of $53.81B. Analysts polled by Investing.com anticipated EPS of $2.09 on revenue of $53.3B. That compared to EPS of $2.34 on revenue of $53.27B in the same period a year earlier. The company had reported EPS of $2.46 on revenue of $58.02B in the previous quarter. The company reported gross margin between 37.3%, above expectations 38.1%
The company previously guided revenue in the range of $52.5-54.5 billion and gross margin between 37% to 38%.
Apple (NASDAQ:) reported $11.45 billion in services revenue for its third quarter of 2019, below analysts’ expectations of $11.65 billion. Services gross margin rose to 64.1% up slightly from 63.8% last quarter.
The higher-margin services segment has taken on significant importance as the tech giant attempts to reduce its reliance on iPhone sales, which make up the bulk of total revenue.
The company reported iPhone revenue fell 12% to $26 billion, in-line with estimates.
The weaker iPhone sales were driven by a subdued Chinese smartphone market, where some of Apple’s rivals have already rolled out 5G-enabled phones.
Looking ahead, the company said it expects to generate fourth-quarter gross margins of 37.5-38.5%, in-line with estimates of 38.3%.
Apple shares gained 0.25% to trade at $209.30 in after-hours trade following the report.
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