Apple Revenue Rises

◊ Apple Stock Rises ◊

Apple Inc. reported revenue rose 1.8% in the September quarter to $64.04 billion behind a rise in sales of wearables and services such as apps, streaming-music subscriptions and mobile payments. Those gains helped offset a 9.2% decline in iPhone sales during the period.

Profit fell 3% to $13.69 billion. That topped expectations but marked the first time since Chief Executive Tim Cook took over in 2011 that Apple’s profit has declined in all four quarters of a fiscal year. The company’s cost of sales have risen considerably since 2017 when it introduced a pricier new iPhone with facial-recognition technology and increased its spending on research and development.

Apple reassured investors that its new iPhone 11 models are being well received, offering guidance for the current period that largely exceeded Wall Street’s projections. It expects sales between $85.5 billion and $89.5 billion for the period, an improvement on the $84.31 billion it posted in the current quarter last year.

In an interview, Chief Financial Officer Luca Maestri said Apple is on track for a strong Christmas sales season thanks to customer interest in the newest iPhones and the addition of new wearables, including a pricier version of AirPods that went on sale this week. He added that the company’s China business has improved considerably and said Chinese customers’ initial response to the new iPhones has been “very, very good.”

“We think the iPhone performance will improve versus what we’ve seen in fiscal 2019,” Mr. Maestri said. “We think wearables will be very strong.”

Some investors have feared new iPhone models introduced in September would fail to catch on with consumers, and weigh on sales in the coming year because they offer limited new features. The iPhone still accounts for more than half of Apple’s revenue.

“The new phones are proving to be enough,” said Stephen Lee, principal at Logan Capital Management, an Ardmore, Pa.-based investment adviser with $3 billion under management that counts Apple among its largest holdings. “It’s been a year where smartphones are transitioning and management has done the things necessary to be relevant when 5G is ready.”


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Apple said per-share earnings in the latest quarter were $3.03. Analysts surveyed by FactSet expected earnings of $2.83 a share. Shares of Apple rose about 1.3% in after-hours trading. Before the report, the stock ended basically flat Wednesday at $243.26.



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