Apple Shares Jump as iPhone, Services Gains Deliver Better-Than-Expected Q3 Results

Apple shares closed 4.7 percent higher Wednesday at $157.14 after a better-than-expected fiscal Q3 earnings report Tuesday. Revenue jumped 7 percent over the 2016 quarter to $45.4 billion on strength in the company’s services business, iPhone 7 and 7 Plus sales, and gains across all categories, said CEO Tim Cook on the earnings call. IPhone sales reached 41 million units, and the company reduced inventory by 3.3 million, its lowest point in two-and-a-half years, said Cook. On rumors components shortages could cause a shipping delay of the 10th anniversary iPhone that's expected to launch next month, Cook said, "We have no comment on anything that's unannounced.” Average iPhone selling prices reached $606 in Q3, up from $595 a year ago, which Chief Financial Officer Luca Maestri attributed to the iPhone 7 Plus, which had a higher percentage of the iPhone mix than the flagship Plus model in the year-ago quarter. Reversing a downward trend, iPad sales saw 15 percent growth year on year, improving in all geographies, producing Apple’s highest tablet global market share in four years, he said. Maestri quoted NPD figures showing iPads grabbed 55 percent of U.S. tablet share in Q2, including eight of the 10 best-selling models. Among tablets priced over $200, which excludes Amazon’s best-selling Kindle Fire tablets, iPad's share was 89 percent, said Maestri, largely driven by sales to the education market. On Apple’s China business, Cook said the iPhone was “relatively flat” year over year, but the services business grew “extremely strongly” in the quarter. Hong Kong, he said, dragged down the Greater China segment. Profit in the quarter grew to $8.7 billion from $7.8 billion in Q3 FY 2016, Apple said.