One day before Apple once again welcomes long lines for the latest iPhone at its stores across the world, the company recorded yet another massive quarter, even without any new phones making a difference on its bottom line.
Apple announced its fourth-quarter earnings on Nov. 2—its fiscal year ends in September—and they crushed Wall Street’s estimates. Analysts had expected the company to generate $50.7 billion in revenue, but it actually posted $52.58 billion, up 12% from the same quarter last year. Profits were up 19% to $10.7 billion in the fourth quarter.
The company’s stock spiked in after-hours trading, both on the strong quarter and Apple’s guidance for next quarter, which will include the holiday season and its release of new iPhones. The company said in a release that it expects to generate between $84 billion and $87 billion next quarter; even the low end of that projection would be a 7% increase over Apple’s record-breaking first quarter last year. At the time of publishing, Apple’s stock price was $174.30, up about 3% from when the market closed.
After a mixed 2016, which saw Apple post its first profit and revenue declines in over a decade, it seems the company is on the upswing again.
The new iPhone 8 and 8 Plus, as well as the Apple Watch Series 3, were released about a week before the end of the fourth quarter. But Apple saw strong sales of iPhones—which still account for over 50% of its total revenue—even with new versions on the horizon. The company sold 46.6 million iPhones this quarter, up more than 1 million from the number it sold in the same quarter last year.
The iPhone X, Apple’s $1,000-and-up new flagship device, hits stores Nov. 3. That likely accounts for part of Apple’s strong first-quarter guidance—even if the company sells the same number of iPhones as it did in the first quarter of 2017, it’ll likely rake in far more cash. The average sale price of an iPhone is currently about $618; it’ll be worth keeping an eye on just how much that figure spikes when Apple reports the first tranche of iPhone X sales.
Of course, Apple’s success extends far beyond its smartphones. The company’s services business, which includes sales of apps, games, music, AppleCare, and subscriptions to iCloud and Apple Music, generated $8.5 billion in the fourth quarter, up about 34%. Over the fiscal year, Services has generated just shy of $30 billion for Apple, making it the size of a Fortune 100 company in its own right. Even when Apple doesn’t have new devices to lure customers, services offerings still seem to keep them inside its walled garden.
This was also a strong quarter for Apple’s computer business. The company unveiled new MacBook Pro laptops and iMac desktops earlier this year, and they appear to have been the devices of choice for students this fall. Apple CEO Tim Cook said this quarter was the strongest quarter ever for the Mac, which generated $7.17 billion in revenue, a 25% increase over the same quarter last year.
The new iPad Pro released over the summer, which Apple has tried to market as a computer perfect for students, does not seem to have resonated quite as strongly with consumers. It generated $4.83 billion in the back-to-school quarter, which is an increase of 13% over the same quarter last year but a sequential drop from the $4.97 billion it generated last quarter, when the device was released.
Cook said that the Apple Watch had “unit growth of over 50%” for the third consecutive quarter, but the company still refuses to break out how many watches it has sold. Instead, watch sales are lumped into Apple’s “Other Products” bucket, which also includes Beats headphones, iPods, other accessories, and its AirPods wireless headphones (which may also be contributing to the uptick in sales for this bucket). Other Products generated $3.23 billion for the fourth quarter, up 36% over last year.
Apple also saw positive gains in two markets that it has set its sights on for future growth. Chief financial officer Luca Maestri said that the company’s revenues in China were up 12% year-over-year, to $9.8 billion. Revenue also doubled, to $2.81 billion, in India, which is included in Apple’s “Rest of Asia” bucket.
Apple now has nearly $269 billion in cash on hand. But it’s still not clear what it plans to do with that all cash (other than petition to bring it back to the US, or possibly build a car), if anything.