Investors and analysts alike responded positively to Apple’s fiscal Q3 earnings report, which reported strong year-on-year growth in both revenue and profits despite near-flat iPhone sales.
Their investment notes highlight what they see as the three biggest positive takeaways …
PED30 and CNBC both have roundups of analyst commentary on the results, from which we see three common threads.
First, that iPhone sales were solid. Although up only 1% year-on-year, that’s in the context of a mature market with limited growth across the sector as a whole.
Second, as we noted earlier, a high average selling price across the iPhone range.
Bank of America Merrill Lynch: Underlying iPhone demand remains strong.
Piper Jaffray: For the June quarter, iPhone was strong, as Apple shipped a total of 41.3 million units.
Third, strong growth in Services income, beating out Apple’s own expectations.
BMO: We are impressed by the iPhone ASP, which bucked normal seasonality. We had expected more of a hit from price elasticity, but consumers are still buying higher-priced devices.
Almost all analysts have raised their target price for AAPL and are optimistic about the future, leaving Oppenheimer’s Andrew Uerkwitz a lone voice in the wilderness:
Wells Fargo: Services momentum continues with adjusted growth at +28% yr/yr and new record revenue for App Store, Music, Apple Pay, AppleCare and iCloud; paid subscriptions +30M q/q to 300M (vs. 185M a year ago).
Mac sales were the one disappointment in yesterday’s numbers, down 13% year-on-year, though even there the news may not all be bad.
Photo: Julian Gigola
