Apple, Inc. AAPL shares traded down in premarket trading on Friday as softer fiscal year third-quarter hardware product sales, with the exception of Macs, and disappointing September quarter guidance warded off investors.
The company reported third-quarter earnings of $1.26 per share and revenue of $81.8 billion, exceeding the consensus estimate of $1.19 per share and $81.7 billion, respectively.
Despite the headline beat, investors were worried because iPhone sales of $39.67 billion that came in shy of the consensus forecast of $40 billion. The company, however, did say iPhone’s active installed base grew to a new all-time high.
iPad and Wearables, Home & Accessories sales also trailed forecasts.
Apple's Services business saved the day for the company, as revenue from the segment clocked a record total of $21.21 billion, exceeding the consensus estimate of $20.74 billion. CEO Tim Cook said the company had more than $1 billion in paid subscriptions for the segment.
Mac sales also came in ahead of expectations amid the transition of the entire lineup to in-house chips.
See Also: Everything You Need To Know About Apple Stock
On the earnings call, CFO Luca Maestri said the company expects September year-over-year revenue growth to be similar to the one seen in the June quarter, which saw a 1.4% year-over-year topline decline.
This should come as a surprise as most analysts, including JPMorgan's Samik Chatterjee, expected the company's year-over-year revenue decline streak to end. The company hinted at forex negatively impacting revenue by 2%.
Apple also said it expects year-over-year performances of the iPhone and Services segment to accelerate from the June quarter. Mac and iPad revenue will likely decline by double-digits year-over-year due to tougher comparisons, it added.
In premarket trading, Apple stock fell 1.49% to $188.33, according to Benzinga Pro data.
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