Apple's fiscal third quarter revenue was down 1% from a year ago, iPhone and iPad sales were light relative to expectations and services revenue surged.
For the third quarter, Apple reported earnings per share of $1.26 with revenue of $81.8 billion.
Wall Street was expecting Apple to report fiscal third quarter revenue of $81.7 billion with earnings of $1.19 a share. As usual, iPhone revenue was expected to carry the quarter.
Going into the quarter, analysts were also interested in Apple traction in India as well as the ability to sell services to the iPhone installed base. Apple iPhone 15 sales won't land until November/December.
In a statement, CEO Tim Cook said third quarter services revenue hit a record in the June quarter with more than 1 billion paid subscriptions.
By the numbers:
- Apple's China revenue was $15.76 billion, up from $14.6 billion a year ago.
- iPhone sales were $39.7 billion in the third quarter, down from $40.67 billion a year ago.
- Mac sales were $6.84 billion, down from $7.38 billion a year ago.
- iPad sales in the third quarter were $5.79 billion, down from $7.22 billion a year ago.
- Wearables revenue was $8.38 billion, up from $8.08 billion a year ago.
- Services revenue in the third quarter landed at $21.2 billion, down $19.6 billion.
Estimates for iPhone sales were $39.9 billion with iPad and Mac, delivering $6.4 billion and $6.6 billion, respectively. Services revenue was expected to come in at $20.8 billion. All estimates were from Refinitiv.
Speaking on a conference call with analysts, Cook said Apple saw record sales in India as well as other countries. India is a closely watched growth region for Apple. Cook said the macroeconomic picture remains mixed and continues to "manage deliberately and innovate relentlessly."
Key comments include:
- Cook said he was "thrilled" by the response to Vision Pro.
- Mac sales were down 7% in the quarter, but Apple completed the transition to its own processors.
- iPad revenue was down 20% in the quarter due to a difficult comparison to a year ago when the iPad Air launched. Back to school season can be a tailwind to iPad.
- Apple Watch sales were in line with the company's expectations.
- Services saw a sequential acceleration in the quarter with Apple Care, Apple TV and Apple Pay showing strength. Cook also said Apple Card is riding Apple Pay momentum.
