Apple published its third quarter financial results on Tuesday, beating market expectations in part because of its record revenue in the Services division. Sales in Services and other categories made up for iPhone revenues that declined year-over-year. Shares were up in after-hours trading.
The Cupertino tech giant reported fiscal third quarter earnings of $2.18 a share, down 7 percent year-over-year, on revenues of $53.81 billion, an increase of 1 percent over the year prior.
Wall Street was expecting earnings of $2.10 per share on revenue of $53.39 billion.
"This was our biggest June quarter ever — driven by all-time record revenue from Services, accelerating growth from Wearables, strong performance from iPad and Mac and significant improvement in iPhone trends," CEO Tim Cook said in a statement. "These results are promising across all our geographic segments, and we're confident about what's ahead. The balance of calendar 2019 will be an exciting period, with major launches on all of our platforms, new services and several new products."
While Cook stressed improving iPhone trends, revenue from iPhone sales totaled $25.99 billion, down from $29.47 billion in Q3 2018. Apple no longer breaks out product unit sales by device.
Mac sales totaled $5.82 billion, up from $5.26 billion, and iPad sales came to $5.02 billion, up from $4.63 billion. The Wearables, Home and Accessories segment brought in $5.53 billion, up from $3.73 billion. Apple's Wearables business is now bigger than 60 percent of the Fortune 500, Cook boasted on a conference call Tuesday.
Services revenue came to $11.46 billion, up from $10.17 billion. The company expects its momentum in Services to continue, particularly with important launches on the horizon. The Apple Card, the company's upcoming credit card that relies on the iPhone, will launch in August, Cook announced Tuesday. Meanwhile, Apple Arcade and Apple TV Plus will roll out in the fall.
Following the news of Apple's $1 billion acquisition of Intel's 5G modem business, Cook said that with respect to 5G, "I think most people will tell you it's... extremely early, early innings of it, and even more so on a global basis."
He added, "We couldn't be more proud of what our lineup is, and we're excited about the great pipeline of both hardware and software, and we won't trade our position for anyone."
Also on Tuesday, Apple announced its board of directors has declared a cash dividend of 77 cents per share of the company's common stock.
In terms of guidance Apple said it expects revenue between $61 billion and $64 billion for its fourth quarter. Wall Street is expecting revenues of $61.02 billion.