Apple Shares Hit All-Time Highs After Fantastic Report

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June is usually a boring quarter for Apple (NASDAQ: AAPL), but this year's was so good that it sent the stock to all-time highs.

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In this segment from Industry Focus: Tech, analyst Dylan Lewis is joined by senior tech specialist Evan Niu to discuss the biggest numbers from the report -- earnings, revenue, iPhone sales, average selling prices, and more -- and explain what made investors so excited for the company's future.

A full transcript follows the video.

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This video was recorded on Aug. 4, 2017.

Dylan Lewis: Apple's earnings report looked pretty darn good.

Evan Niu: Yeah, it was a pretty strong beat. It's funny, because seasonally, the June quarter is usually a boring quarter, but this one was such a good report that it sent shares to all-time highs, and now Apple is approaching and $800 billion market cap thanks to this report.

Lewis: Yeah, looking at the big numbers, we have revenue at $45.4 billion, which beat estimates by $500 million. Earnings came in at $1.67 a share, which also beat expectations. So, great stuff on the top and bottom line. Like you said, stock jumped on the news, new all-time highs. Why don't we look at some of the different segments here, starting out with the iPhone?

Niu: iPhone, they sold about 41 million units, which was a little bit ahead of consensus expectations. But, with all the talk, there are so many iPhone 8 rumors, and this is going to be a pretty big product cycle this year. For most people who follow Apple even remotely, they know, we have a new iPhone coming, don't buy an iPhone now, wait a couple months to buy an iPhone. So it's pretty crazy that they were able to put up such a strong number, given the fact that, Tim Cook has acknowledged that these types of rumors have been hurting the business, particularly within the last few months, at least last quarter, quarter before this. He very much acknowledged that it's hurting demand. So, the fact that they were still able to come in with a relatively strong number for a summer quarter, I thought, was pretty strong.

Lewis: And this segment continues to make up the lion's share of Apple's top line, in addition to some really solid stuff over on the unit side. Average selling price looked pretty good, too, came in at $606, which is up from $595 a year ago. I think what you're seeing there is the influence of the Plus models, and some of the higher-value models in their product line. 

Niu: Right. And with all these rumors that this next one is going to be really -- I've seen reports that the next iPhone could cost anywhere from $1,000 to $1,400. $1,400 sounds a little nuts, but the point is, I think they are going to try to pack a lot of new features into this new one, and obviously that will only help average selling prices going forward. I can imagine this is going to be a massive cycle, with what they have in store, depending on if they can actually produce enough of them. The big feature being, potentially, an OLED display, and OLED displays are quite expensive. And the way that Apple always prices its products is, they have their own margin profile they want to maintain, so if one of their components is expensive, that's going to translate into a bigger increase on the actual retail price, compared to, for example, if another manufacturer wanted to include the same feature but was willing to sacrifice on margins. But Apple charges for their features, so any big new feature will cost you. So, I do think there's going to be some upside for ASPs going forward.

Lewis: Yeah, they're always happy to pass along costs to the customer, and it seems like people are happy to pay for it. [laughs] I'm certainly guilty of that.

Dylan Lewis owns shares of Apple. Evan Niu, CFA owns shares of Apple. The Motley Fool owns shares of and recommends Apple. The Motley Fool has a disclosure policy.