Apple earnings surge as it beats Wall Street forecasts

Mandy Carr
November 3, 2017

Apple notes in their earnings report that Services revenue in their fiscal 4th quarter of 2017 included "a favorable one-time adjustment of $640 million due to a change in estimate based on the availability of additional supporting information".

The company hired two veterans from Sony TV to run its fledgling division, and according to the Hollywood trade publications, Apple is looking to spend $1 billion on originals, including a remake of Steven Spielberg's Amazing Stories TV anthology. The real question is: Can Apple fulfill demand, or will sales be hampered by previously-reported supply chain issues?

After the iPhone 8's muted rollout in late September, the lines of people willing to wait overnight suggest massive demand for the iPhone X - despite its USA $1,000-plus price tag.

Apple's revenue guidance for Q4 2017 fell between $49 billion and $52 billion, with gross margin estimated to be between 37.5% and 38%. A year ago, Apple generated 78.4 billion during the holiday quarter.

The X goes on sale Friday. That's higher than it expected during the same period a year ago, $76 billion and $78 billion, and slightly above analyst expectations.

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Apple's market capitalization of about $868 billion makes it the world's most valuable publicly traded company.

Apple shares have climbed with the approach of the launch date, seeing a jump this week after it said pre-orders for iPhone X are "off the charts". The company is also set to sell the HomePod, a Siri-powered speaker to answer both Amazon's Echo line and Google's Home speakers. Sales in China were up 12%, reversing a drop off in the company's second largest market. The iPhone 8 went on sale a week before the end of the September quarter, and contributed to fiscal fourth-quarter results.

Wang Hao, a 24-year-old engineer in the northeastern port city of Dalian, said he ordered the new phone despite the high price tag. Despite doom and gloom in the media, the later release of the iPhone X seems not to have hurt Apple's iPhone numbers significantly. That may have pushed more sales into the holiday quarter.

The company also did not say whether it had concerns about building enough iPhone X units to satisfy demand; many analysts have said they've already factored likely delays that could stretch well into 2018 into their forecasts.

The innovation may prove an important step on the path to Apple's potential next big product, smart glasses, for which CEO Cook has created a dedicated team.

Other reports by Guamnewswatch

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