Apple signaled solid demand for its latest line of iPhones during its crucial holiday season on Wednesday as strong fourth-quarter earnings results topped Wall Street’s expectations. Apple shares were up more than two percent in after-hours trading.
The tech giant released three variants of its iPhone 11 line of smartphones in late September, meaning its fourth-quarter report included just a few days of sales. However, analysts were watching for early returns on the flagship product, as well as Apple’s first-quarter-guidance, which includes the critical holiday sales season.
Apple said it expects revenue of between $85.5 billion to $89.5 billion. The guidance affirmed Wall Street’s expectation of first-quarter revenue of $86.92 billion.
The tech giant reported fourth-quarter earnings per share of $3.03, topping the $2.84 EPS expected by analysts polled by Refinitiv. Quarterly revenue was a record $64 billion, also outpacing Wall Street’s projections of $62.99 billion.
“We concluded a groundbreaking fiscal 2019 with our highest Q4 revenue ever, fueled by accelerating growth from Services, Wearables and iPad,” said Tim Cook, Apple’s CEO. “With customers and reviewers raving about the new generation of iPhones, today’s debut of new, noise-canceling AirPods Pro, the hotly-anticipated arrival of Apple TV+ just two days away, and our best lineup of products and services ever, we’re very optimistic about what the holiday quarter has in store.”
Apple and Microsoft have been passing the title of the world’s most valuable company since the end of 2018. The company behind the Mac Book and iPhones retook the honor in mid-October following the company’s announcement of its upcoming subscription services for gaming and streaming.
Last year, weak holiday guidance sent shares sharply downward after executives warned difficulties in China would hinder results.
Apple reported its latest results just days before the debut of Apple+, a streaming service that will compete directly with offerings from Netflix and Disney. Available Friday, the service costs $4.99 and features several original series developed by the iPhone maker. Its service hits the market as the offering with the lowest price point compared to Netflix's which offers three monthly options at $8.99, $12.99 and $15.99 or Disney+ which will launch on Nov. 12 at $6.99 per month.
The tech giant also unveiled a premium version of its wireless headphones, the AirPod Pros, which went on sale Wednesday at $249.00 apiece.
Sales of iPhone models generated $33.4 billion in revenue, well ahead of expectations but below results from the same quarter one year ago.
Apple CFO Luca Maestri said the company returned more than $21 billion to shareholders in the form of dividends and share buybacks in the fourth quarter.