Apple beats analyst profit estimates in fiscal Q4 2019


On Wednesday, Apple revealed it generated $64 billion in revenue in the fiscal fourth quarter of 2019. Moreover, the firm recorded $13.7 billion or $3.03 per share in profits for the period ending September 28. As such, the corporation beat analyst expectations of $63 billion in revenue and earnings of $2.84 per share.

Notably, while Apple released a new iPhone during the last quarter, its robust services segment actually helped the firm outpace Wall Street’s expectations.

iPhones Sales Down, Services Revenue Up

Following the aberrant fiscal third-quarter, Apple once again drew more than 50 percent of its revenue from iPhone sales. In FQ4 2019, the corporation sold $33.4 billion in handsets, including the new iPhone 11. Earlier this month, the firm asked its suppliers to increase production on its latest smartphone to meet higher-than-expected demand.

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According to Bloomberg, market analysts forecast the corporation only selling $32.4 billion in iPhones in the last quarter. Nevertheless, Apple device revenue fell by 10.2 percent year-on-year. It is worth noting the base model of the iPhone 11 is $50 cheaper than its predecessor, the iPhone XR.

Conversely, Apple saw an impressive 19 percent increase in services revenue. In FQ4 2018, the firm’s software division generated $10.5 billion in sales. But in FQ4 2019, the same segment brought in $12.5 billion. Moreover, the firm increased its non-hardware capital intake by 8.69 percent from FQ3 2019.

Notably, the Big Tech firm’s services only represented 16.9 percent of the total revenue in the same period last year. However, in the quarter ending September 28, the segment was responsible for 19.5 percent of the firm’s overall sales.

Currently, Apple’s income is still primarily dependant upon moving hardware. But the explosive and consistent growth of its services income indicates where the firm’s future lies.

Strong Holiday Quarter Forecast

In addition to its FQ4 2019 earnings, Apple also offered guidance for the forthcoming holiday quarter. CEO Tim Cook noted that the company is “very optimistic” about the October through December period and forecast sales of $85.5 million to $89.5 billion. Currently, Wall Street projects the corporation will generate $86.5 billion in FQ1 2020.

As the iPhone 11 went on sale on September 20, its performance next quarter will offer a better picture of its popularity. Besides, the corporation is launching its new Apple TV+ streaming service on November 1. Also, the company will record the revenue from its new Apple Arcade game streaming service in Q1 2020. The platform launched in September, but the firm gave customers a one-month free trial.

With stronger-than-expected demand for the iPhone 11 and the introduction of two appealing new services, Apple’s 2019 holiday quarter should be a very profitable one.