Investing.com - Apple (NASDAQ:AAPL) reported fiscal-third-quarter earnings that were down from a year ago but topped expectations. The result reflected, in part, slower than expected growth in services.
The technology company reported earnings per share of $2.18 on revenue of $53.81B. Analysts polled by Investing.com had anticipated EPS of $2.09 on revenue of $53.3 billion. That compared to EPS of $2.34 on revenue of $53.27 billion in the year-ago quarter. The company had reported EPS of $2.46 on revenue of $58.02 billion in the fiscal-second quarter.
The company reported gross margin between 37.3%, above expectations 38.1%
The company previously guided revenue in the range of $52.5-54.5 billion and gross margin between 37% to 38%.
Apple (NASDAQ:AAPL) (NASDAQ:AAPL) reported $11.45 billion in services revenue for its third quarter of 2019, below analysts’ expectations of $11.65 billion.
But Apple CEO Tim Cook told Reuters 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%.
Services gross margin rose to 64.1% up slightly from 63.8% last quarter.
The higher-margin services segment has taken on significant importance as the tech giant attempts to reduce its reliance on iPhone sales.
The company reported iPhone revenue fell 12% to $26 billion, in-line with estimates. The iPhone represented 48.3% of total revenue in the quarter.
The weaker iPhone sales were driven by a subdued Chinese smartphone market, where some of Apple's rivals have already rolled out 5G-enabled phones.
Looking ahead, the company said it expects to generate fourth-quarter gross margins of 37.5% to 38.5%, in-line with estimates of 38.3%.
Apple shares (NASDAQ:AAPL) gained 0.25% to trade at $209.30 in after-hours trade following the report
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