Apple Inc. (NASDAQ:AAPL) reported fiscal third-quarter results that beat Wall Street expectations and raised its forecast for fourth-quarter revenue.
Revenue from Apple services drove the positive results in the fiscal third quarter, rising 12.6% to $11.46 billion U.S., a new record. Apple CEO Tim Cook told reporters that after factoring out a one-time payment from lawsuits a year ago and foreign-exchange effects, the services segment growth rate would have been 18%. Cook also said that "marked improvement in greater China" drove the growth.
Sales of Apple's flagship iPhone fell 12% in the quarter to $25.99 billion, about in line with analyst expectations of $25.96 billion, according to Refinitiv data. iPhone sales in China fell 4% to $9.16 billion, after declining 22% in the fiscal second quarter.
For the fiscal third quarter ended in June, Apple reported a 1% rise in revenue to $53.8 billion and a 7% drop in earnings per share to $2.18, compared with expectations of $53.39 billion and $2.10 per share, according to Refinitiv data.
Apple said it expects revenue for the current fiscal fourth quarter of between $61 billion and $64 billion, compared with analyst estimates of $61.02 billion. Apple's services, which include Apple Music, the App Store and iCloud, are a source of growth for Apple as iPhone sales slow. In the coming months Apple plans to release a credit card and subscription services for both gaming and television.
Apple shares were up 3.5% to $216.10 in after-hours trading following the news.
