Apple reports earnings after the bell

Posted November 03, 2017

Apple notes in their earnings report that Services revenue in their fiscal 4th quarter of 2017 included "a favorable one-time adjustment of $640 million due to a change in estimate based on the availability of additional supporting information".

The good news is that Apple seems to be confident that it will be able to ship plenty of iPhone X devices, or possibly make up for any delayed orders with the iPhone 8.

In Singapore, there are "hundreds" waiting for the iPhone X outside Apple's freshly-opened store.

Apple did not disclose how many customers had placed preorders of the iPhone X, nor did its release comment on speculation iPhone X demand has hurt iPhone 8 sales.

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"I've got goosebumps - it's another great quarter, tremendous momentum and we've got the iPhone X to look forward to", Hank Smith, chief investment officer at Haverford Trust, which owns Apple shares, said in a Bloomberg Television interview.

Analysts on average were expecting total revenue of $50.7 billion, according to Thomson Reuters I/B/E/S.

The iPad continued its return to sales growth as well, with 10.3 million units sold last quarter, beating the year-ago sales numbers by 11 percent.

Services and software continue to burn brightly in Apple's universe, bringing in a record $8.5 billion last quarter, and outshining last year's revenues by an incandescent 34 percent.

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The iPhone 8 and 8 Plus phones were well received by critics but were so similar to the previous 7 and 7 Plus models that carriers reported less interest in the new phones than years past.

"Price appears to be a major constraint on iPhone X demand, particularly in China", Bernstein analyst Toni Sacconaghi said in a recent report that showed three-quarters of Chinese respondents were excited by the upcoming launch, but only a quarter said they planned to buy one. A year ago, Apple generated 78.4 billion during the holiday quarter.

The organic light-emitting diode technology used in iPhone X screens is now sourced from just one supplier, Samsung Display Co., while the array of components used to make the three-dimensional sensor have never previously been manufactured in the quantities required for the iPhone X, and suppliers have struggled to ramp up production effectively. Six analysts surveyed by Zacks expected $51.17 billion.

The redesigned Apple iPhone X gets rid of the Home button and adds a 3D face scanner. That represented 25 percent growth from the same period a year earlier when sales were $5.74 billion.

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