Apple published its fourth quarter financial results on Thursday, beating market expectations and posting its best September quarter ever. Services revenue reached an all-time high of $10 billion, while the iPhone and Wearables set September revenue records. However, iPhone sales were flat year-over-year, and Apple's Q1 outlook is cautious.
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The Cupertino, Calif. company posted Q4 earnings per diluted share of $2.91, up 41 percent year-over-year. Revenue came to $62.9 billion, an increase of 20 percent from the year-ago quarter.
Wall Street was expecting earnings of $2.78 per share on revenue of $61.57 billion.
For fiscal 2018, Apple delivered net income of $59.5 billion, or $11.91 a share, on revenue of $265.6 billion.
"We're thrilled to report another record-breaking quarter that caps a tremendous fiscal 2018, the year in which we shipped our 2 billionth iOS device, celebrated the 10th anniversary of the App Store and achieved the strongest revenue and earnings in Apple's history," CEO Tim Cook said in a statement. "Over the past two months, we've delivered huge advancements for our customers through new versions of iPhone, Apple Watch, iPad and Mac as well as our four operating systems, and we enter the holiday season with our strongest lineup of products and services ever."
iPhone sales for the quarter were flat year-over-year at 46.89 million. iPhone revenue, however, came to $37.19 billion -- a 29 percent jump from a year earlier. That puts the average selling price at $793, compared to $618 a year ago. Sales were driven by strong performance of the iPhone X, 8 and 8 Plus, Apple said, as well as the launch of iPhone XS and XS Max in the September quarter this year.
"The XS and XS Max got off to a really great start," Cook said on a conference call Thursday.
Apple sold 9.69 million iPads, which brought in $4.09 billion in revenue -- a 15 percent decline in revenue year-over-year. It sold nearly 5.3 million Macs, bringing in $7.41 billion in revenue -- a 3 percent increase in revenue.
At $9.98 billion, services revenue was 17 percent higher than a year prior. Within Services, Cook highlighted the "exceptional performance" of Apple Pay, which saw its transaction volume triple year-over-year.
"To put that into perspective, Apple Pay generated significantly more transactions than even PayPal Mobile with over 4x the growth rate," he said.
During Q4, Costco completed the rollout of Apple Pay to over 500 US warehouses, while Neiman Marcus is now accepting Apple Pay at over 40 stores across the country. With these additions, Cook noted, 71 of the top 100 merchants and 60 percent of all US retail locations support Apple Pay.
"Other products" revenue, which includes sales of Apple TV and wearables like the Apple Watch, came in at $4.23 billion, an increase of 31 percent. That growth was driven largely by Wearables growth, which came in at over 50 percent.
As for its geographic segments, revenue from the Americas totaled $27.52 billion, a 19 percent year-over-year increase. Revenues grew 16 percent year-over-year in China, 18 percent in Europe, 34 percent in Japan and 22 percent in the rest of the Asia Pacific. The iPhone saw double-digit growth in China, while the "other products" category was stronger in China than it was overall.
For Q1 2019, Apple is expecting revenue between $89 billion and $93 billion. Analysts are expecting revenue of $92.91 billion.