Apple earned $1.28 a share on revenue of $37.4 billion in the quarter, up from $1.07 a share and $35.3 billion in revenue last year. Analysts surveyed by Thomson Reuters expected earnings of $1.23 a share on revenue of $37.99 billion. Gross margin widened to 39.4% from 36.9%. The company sold 35.2 million iPhones, and 13.3 million iPads, and 4.4 million Macs this quarter, with iPad sales being the weakest: they saw a 19% drop in unit sales and a 23% year-over-year drop in revenue.
For the fourth quarter, Apple expects revenue between $37 billion and $40 billion, below analysts' estimates of $40.4 billion. Apple also announced a 47-cent per common-stock share dividend.
“Our record June quarter revenue was fueled by strong sales of iPhone and Mac and the continued growth of revenue from the Apple ecosystem, driving our highest EPS growth rate in seven quarters,” said Apple CEO Tim Cook in the press release. “We are incredibly excited about the upcoming releases of iOS 8 and OS X Yosemite, as well as other new products and services that we can’t wait to introduce.”
Analysts expect Apple’s largest-ever product launch this fall in the release of the new iPhone with a larger screen. Additionally, a new patent published by the U.S. Patent and Trademark Office for a device called the “iTime” (filed in 2011, but published yesterday) indicates that Apple is designing a wrist device that can connect to other Apple portables such as the iPhone and iPad.
Microsoft (MSFT) shares gained 1.2% to $45.35 following the release of quarterly results that beat expectations but missed the bottom line.