Apple earnings beat, but its holiday outlook disappoints
Apple offered a disappointing outlook for holiday sales in its fiscal fourth-quarter earnings report, hinting at softer-than-expected demand for the tech giant's more expensive new iPhones. The company expects fiscal first-quarter 2019 revenue to be between $89 billion and $93 billion, below analysts' expectations.
It reported fiscal fourth-quarter earnings of $14.13 billion, giving the Cupertino, California-based company net income of $2.91 per share. That surpassed Wall Street expectations. The average estimate of 12 analysts surveyed by Zacks Investment Research was for earnings of $2.79 per share.
The maker of iPhones, iPads and other products posted revenue of $62.9 billion in the period, which also topped Street forecasts. Ten analysts surveyed by Zacks expected $61.49 billion.
More profit per iPhone
Upping the price for its new lineup of iPhones seems to be working out for Apple's bottom line. Despite selling fewer smartphones than analysts expected in its latest fiscal quarter, it's earning more on each phone than Wall Street anticipated, driving profits higher than ever.
Apple reported the average selling price of each iPhone sold during the quarter was $793, a leap from $618 in the year-ago quarter and better than analysts' estimates of $750.
It sold 46.9 million iPhones in the quarter that ended Sept. 30, below the 48.4 million Wall Street expected, but it generated $37.2 billion in iPhone revenue, partly because of the pricier smartphones. Apple's new XR model is expected to be a hit with holiday shoppers looking to upgrade attracted by its lower price point than the XS and XS Max.
Stock falls in extended trading
Apple reached the milestone of being the first public company to hit a $1 trillion market capitalization in August after reporting gangbuster quarterly earnings. After today's earnings announcement following the close of trading, the stock declined around 7 percent as investors focused on Apple's muted holiday outlook. It closed regular-hours trading up 1.5 percent to $222.
The shares had slid 3.1 percent in October's tumultuous market, not bad given how poorly many other technology names performed.
Amazon plunged 20 percent, Netflix fell 19.3 percent, Google-parent Alphabet shed almost 10 percent and Facebook declined nearly 8 percent. Overall, the tech-laden Nasdaq Composite fell 9.2 percent, its biggest monthly tumble since late 2008 as climbing interest rates and worries about tariffs and the economy hit hard.
-- The Associated Press contributed reporting.