This afternoon, Apple announced their earnings for the third quarter of the 2018 fiscal year, and as we’ve all come to expect, they did very well again. Revenue for the quarter was up 17% year-over-year to $53.3 billion. Margins were a very healthy 38.3%, although down slightly from 38.5% last year. Operating income for the quarter was $12.6 billion, with a net income of $11.5 billion. This resulted in earnings per share of $2.34, up from $1.67 a year ago.

Apple Q3 2018 Financial Results (GAAP)
  Q3'2018 Q2'2018 Q3'2017
Revenue (in Billions USD) $53.265 $61.137 $45.408
Gross Margin (in Billions USD) $20.421 $23.422 $17.488
Operating Income (in Billions USD) $12.612 $15.894 $10.768
Net Income (in Billions USD) $11.519 $13.822 $8.717
Margins 38.3% 38.3% 38.5%
Earnings per Share (in USD) $2.34 $2.73 $1.67

As usual, the iPhone continues to be the major source of revenue for the company. This quarter, Apple sold 41.3 million iPhones, which is up 1% from the same quarter a year ago, but revenue for iPhone was up an impressive 20%, meaning the higher priced models are selling well. Average sales price for an iPhone is now $724.12, which is much higher than in the past. Just a year ago, the ASP was barely over $600, and two years ago it was $595.26. This is a pretty significant jump.

Generally, we’d discuss Mac and iPad next, but both are now dwarfed by Apple’s Services segment, which is revenue from the App Store, digital content, AppleCare, Apple Pay, licensing, and other services. This has been the fastest growing segment of Apple for the past couple of years, and this quarter revenue was up another 31% from a year ago, to $9.55 billion. Clearly much of this is also tied to the iPhone, which just reinforces the profits from that device.

iPad was almost flat for the year, up 1% to 11.5 million units sold, but revenue here is down 5% to $4.7 billion, which isn’t surprising with Apple recently lowering the entry level cost to their tablet. iPad sales aren’t small by any means, but the demand for them has definitely tapered off over the last couple of years.

Mac sales were down rather sharply, with 13% less units sold this quarter compared to the same quarter a year ago. Apple sold 3.72 million Macs, which is 572,000 less than a year ago. Revenue wasn’t affected quite as strongly, being down just 5% to $5.33 billion, so the average selling price of a Mac is now $1432. A year ago, ASP for the Mac was $1302, so as with the iPhone, Apple is making more per Mac now, but unlike the iPhone the sales are down significantly when the PC market as a whole actually grew.

Apple’s “Other Products” which includes AirPods, Apple TV, Apple Watch, Beats, Home Pod, iPod, and accessories, had a strong quarter as well, with revenue up 37% to $3.74 billion. We don’t get to see a breakdown of products in this segment to see what’s performing and what’s not, but Apple has been slowly adding to their Other Products lineup, and the group as a whole is doing well.

Apple Q3 2018 Device Sales (thousands)
  Q3'2018 Q2'2018 Q3'2017 Seq Change Year/Year Change
iPhone 41,300 52,217 41,026 -21% +1%
iPad 11,553 9,113 11,424 +27% +1%
Mac 3,720 4,078 4,292 -9% -13%

For Q4, Apple is expecting revenue between $60 billion and $62 billion, with margins between 38 and 38.5%.

Source: Apple Investor Relations

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  • baka_toroi - Wednesday, August 1, 2018 - link

    Most people here are socially retarded and don't have the ability to understand why non technical users flock to iOS. Reply
  • rocky12345 - Wednesday, August 1, 2018 - link

    I find it flawed that anyone would put Apple into the same group as the group of things like Lambo's jetliners etc etc etc they are not a premium product like those in that kind of group but Apple would like to try and tell everyone they are which is a out right lie. Smart people buy products that will be of the most use to them for their daily needs dumb people are the ones that buy crap just to show off what they have and it does not matter to them if the product is actually good or not as long as it ups their status rating.

    It is really sad that there are so many people that actually think having a Apple phone or Apple PC yep it's a PC just like any other PC (Personal Computer) but Apple would like to to believe they inject magic happy juice into their products that makes them like nothing else on the planet.

    News flash their products are made form the same parts that everybody else use inside any given device. I also find it very funny that if the MAC OS is so special and so powerful why does at least 75% of the MAC user flock to install Windows OS on their shiny new MACS & then they go out of their way to promote how good the OSX is and how bad Windows is but secretly they are enjoying that Windows install to it's max if Windows is so bad then do not have it on your MAC use the provided OS Apple likes to slap on their systems that is still based on code form the 90's
    Reply
  • web2dot0 - Wednesday, August 1, 2018 - link

    A trillion dollar worth of dumb 🤔 Reply
  • web2dot0 - Wednesday, August 1, 2018 - link

    People made fun of Apple raising prices on their phones with IPhone 8/X but look who’s laughing now 🤣 Reply

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