Apple Finishes Q3 Strong With Hopes For Q4
August 28, 2017 (Investorideas.com Newswire) At the beginning of August, Apple revealed its latest earnings and revenue report. Its third-quarter earnings were far higher than any analyst's original prediction, putting the Cupertino-based company in a very comfortable position for the unveiling of its latest iPhone generation later this fall.
As of August 1, Apple reported revenue of $45.5 for the third-quarter, with earnings off $1.67 per share. That puts Apple up by $3 billion since last year's third-quarter check-in.The gains they made equalled more than a 5% increase in shares, allowing for a record-high opening the day following their report.
Their success in the market relies on consumer's willingness to upgrade to the current iPhone 7, despite the iPhone 8's upcoming release. Though it may have had a rocky start in 2016, the 7 series has proved to be the company's best-selling model, accounting for 81% of all iPhones sold in the U.S.
Its performance has overshadowed what Apple calls its legacy models, like the iPhone 5S or SE. Though cheaper than the latest iPhone, they are older and subject to glitches. They also won't accommodate the newest iOS 11 once its released alongside the 8. For this reason, many consumers could be upgrading to the better and more expensive 7 series despite many of them having to apply for payday loans to cover its $1,000+ price tag. Ranging between $100 and $500, a payday loan is often the only way to bridge the gap left in savings when making such a large purchase.
Perhaps high off of their own success, Apple foresees even greater gains in the following quarter. The iPhone 8-the handset that will commemorate the 10th anniversary of the very first iPhone-is slated to launch sometime this fall. When exactly we can expect to see this particular phone is uncertain. Apple's planned originally for a September launch so that it coincided with the actual anniversary of the first iPhone; however, the latest rumours suggest production delays may set back the model as far as December.
Regardless of the issues they face, Apple expects the iPhone 8 will sell quickly as it's rumoured to be the most innovative model yet. With facial recognition, AR capabilities, a new OS, and an edge-to-edge AMOLED screen, it could very well impress critics. As a result, they've set their expected earnings to hit $52 billion by the end of the fourth quarter.
Wall Street analysts aren't so sure. They expect Apple to finish its fiscal year with $49.21 billion; however, their predictions were off in the past. At the time of the third-quarter report, analysts were stunned, having predicted a more modest showing in their reports. They had expected a slower period of growth in anticipation of the iPhone 8, assuming less people would upgrade to the iPhone 7 when the opportunity to update to the latest series was only several months off. As a result, they slated Apple earnings to hit $44.9 billion with $1.42 per share.
How Apple will end the fiscal year will all depend on the success of the iPhone 8. In the face of production delays and such a strong third-quarter thanks to its 7 series, it's anybody's guess as to how it will fair. On the one hand, the iPhone 8 promises significant changes that could give Apple a competitive edge on Amazon and Google. On the other hand, with so many people upgrading to the 7, it's unlikely they'll make the switch to the 8 so soon. We'll just have to wait and see how the market closes.
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