Apple has reported its fourth quarter revenues, and while Services set a new record, iPhone sales missed expectations.
The company posted revenue of $62.9 billion for the quarter ending September 30, up 20 percent from the corresponding quarter a year prior.
The company had anticipated between $60 billion and $62 billion, while Wall Street was expecting $61.57 billion and earnings per share of 2.78.
Apple Services – which includes Apple Pay, Apple Music, and Apple Stores – had its best ever quarter, reaching an all-time high of $10 billion in revenue, up 27 percent from $7.9 billion in Q4 2018.
Quarterly earnings per share were $2.91, up 41 percent.
Apple Services Hit All-Time High
Apple CFO Luca Maestri said the company generated $19.5 billion in operating cash flow and returned over $23 billion to shareholders in dividends and share repurchases.
“We concluded a record year with our best September quarter ever, growing double digits in every geographic segment,” he said.
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CEO Tim Cook added: “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 line-up of products and services ever.”
However, iPhone unit sales were flat over the year, missing analyst expectations.
Apple sold 46.89 million iPhones, compared to 46.68 million in Q4 2017 – although iPhone revenue was up 29 percent.
iPad sales and revenue both dropped over the year – 6 percent and 15 percent respectively.
Read more: Huawei Topples Apple in Smartphone Battle
Apple Mac shipments reached 5.3 million in the quarter, down 2 percent. Mac revenue was 7.4 billion, up from $7.1 billion a year ago.
For Q1 2019, Apple is anticipating revenue of between $89 billion and $93 billion; gross margin between 38 percent and 38.5 percent; and operating expenses between $8.7 billion and $8.8 billion.
By region, Apple saw revenue growth in every reported segment over the year. In particularly, revenue in Japan rose 34 percent year over year, from $3.9 billion to $5.2 billion.
International sales accounted for 61 percent of the quarter’s revenue, Apple said.
In Apple’s earnings call, Cook in particular pointed to the performance of Apple Pay, which saw transaction volume triple year over year.
Cook also admitted that recent regulations in China, such as in regards to gaming, have meant “things are not moving the way they were moving previously”.
“I don’t view that that issue has anything to do with the trade-related discussions between the countries,” he added. “I think that is strictly a domestic issue in China.”
Cook said he is optimistic that trade discussions between the China and the US will be fruitful.
“These trade relationships are big and complex, and they clearly do need a level of focus and a level of updating and modernization.
“And so I’m optimistic that the countries, the US and China and the US and Europe and so forth, can work these things out and work for the benefit of everyone.”
