Apple Q2 Earnings Beat But iPhone Sales Down Again Even As Revenue From Services Grows By 18% YoY

The much anticipated Apple earnings report for its second fiscal quarter of 2017 have been released. Here’s a quick breakdown of the numbers by CNBC;

  • Adjusted EPS: $2.10 per share reported for the fiscal second quarter vs. $2.02 per share expected by a Thomson Reuters consensus estimate
  • Revenue: $52.9 billion reported vs. $53.02 billion expected by a Thomson Reuters consensus estimate
  • iPhone unit shipments: 50.8 million vs. 52 million expected by FactSet
  • Revenue guidance for fiscal Q3: Between $43.5 billion and $45.5 billion vs. $45.6 billion expected, according to a Thomson Reuters consensus estimate
  • Gross margin guidance: Gross margin between 37.5 percent and 38.5 percent next quarter, Apple forecasts
  • In the year-earlier period, Apple had earnings per share of $1.90 on revenue of $50.56 billion.

Apple sold fewer iPhones till date as seen in the report. Apple sold 50.7 million iPhones in the last three months compared to 51.1 million iPhones in the same quarter last year. But as with recent earning reports by Apple, services have always rescued Apple making it market capitalization still close somewhere around $775b yesterday.

In the quarter ending March 31st, Appel sold 8.9 million iPads, 4.1 million Macs compared to 10.2 million iPads and 4 million Macs in the same period last year. On the report, Apple CEO Tim Cook says “We are proud to report a strong March quarter, with revenue growth accelerating from the December quarter and continued robust demand for iPhone 7 Plus…We’ve seen great customer response to both models of the new iPhone 7 (PRODUCT)RED Special Edition and we’re thrilled with the strong momentum of our Services business, with our highest revenue ever for a 13-week quarter.”

The 1 percent drop in the number of iPhones sold is something that got investors worried but Apple seems to be holding up against projections.

Revenue from Apple services increased by 18 percent year over year.

Tim Cook told CNBC that “the App Store was up 40 percent and our developer community is growing by over 20 percent. There is a lot of momentum.”

Apple R&D expenses hit $2.78 billion during the quarter, up from $2.51 billion a year ago. Overall revenue from services stood at $2.8b.

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