Apple Q3 Results Beat Wall Street Expectations, But IPhone Sales Fall Short

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Apple beat Wall Street estimates for its third-quarter earnings and revenue, but sales of the iPhone — which still accounts for roughly half of all company revenue — came in lower than expected.

Earnings came in at $2.18 a share, well ahead of analysts’ consensus for $2.10 a share, though the profit still slipped from $2.34 in the same quarter a year ago. Total revenue came in at $53.8 billion, better than the forecast for $53.4 billion and ahead of the $53.3 million in the year-ago period.

Revenue from the iPhone hit $26 billion, short of the estimate for $26.5 billion.

The results follow two quarters of weakness, including the first decline in iPhone sales since the launch of the device a decade ago. The company’s services unit, including the iTunes, Apple Pay and newer initiatives in gaming, news and credit cards, has become the focus of the tech giant as hardware sales erode and consumers keep devices for longer.

The U.S.-China trade war has hit Apple, with sales declining in China. As overall iPhone sales fell 17% last quarter compared with the same period last year, iPhone sales in China fell 22%. The durability of the trade friction has escalated investor worry about the road ahead.

Despite clouds on the horizon, Apple shares have risen 31% this year, best of any FAANG company besides Facebook. The stock shed a fraction Tuesday to close at $208.78.

Hollywood has been looking closely at Cupertino for any indications about its streaming video strategy. While Apple TV+ will go live in just a few short months, and earlier this year the company hosted a talent-heavy curtain-raising, major aspects of the subscription service have not been confirmed. Key blanks to fill in include price, content, launch date and distribution.

Dealmakers, talent and suppliers have all said Apple is promising to have more details in the coming weeks.

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