Apple shares soar in after-hours trade as earnings beat expectations

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In fact, one out of every four iPhone units sold in the quarter was the tenth anniversary model. That beats analysts' expectations of $52.31 billion on $2.18 earnings per share.

Billions of dollars that Apple has been spending to buy back shares could soon help propel the company past the one-trillion-dollar mark for market value.

Shares rose 3.4 percent to $196.80 in after-hours trade. Apple's Mac unit, which has been drawing complaints from consumers, reported a 5 percent drop in sales. Apple (NASDAQ:AAPL) sold a total of 41.3 million iPhone units, but the projected amount was 41.6 million units.

Compared to Q3 2017, revenue generated by iPad and Mac sales declined by 5% each, though Apple was able to more than make up for those losses with a 20% increase in revenue earned from iPhone sales.

This has driven up the Average Selling Price to $724, beating the expected ASP of $699.

In the earnings call, Cook said the growth of the iPhone across many markets has been higher than that of the smartphone industry itself.

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Apple is ever-so-close to becoming the first US company worth more than $1 trillion: The company closed in on the magic number Tuesday in after-hours trading after posting better-than-expected results for its fiscal third quarter, which ended June 30. Even more impressive was the growth in revenue from services such as Apple Music and iCloud, which grew by 31% compared to the previous year.

But Apple is reportedly betting big on the design and features it introduced with the iPhone X. Rumors suggest that all three phones Apple is working on for the fall will mimic the iPhone X's design and adapt features like Animoji and Face ID unlocking. Samsung's Galaxy Note 9 launch, slated for next month, reportedly had to be sped up because of the tepid S9 sales. Other potential tariffs on the horizon could, though, and Cook said he was "optimistic that the countries will get through this" and that Apple is "hoping that calm has prevailed".

Apple said the average selling price of the iPhone had risen to more than $US700 in the quarter, showing that each customer is paying more for the company's gadgets.

The Cupertino, Calif. -based company benefited from a 31% surge in Apple's booming Services division-it includes ApplePay, iCloud, and AppleMusic-and continued growth for iPhone and China.

In terms of consolidated numbers shared by the company, Apple sold 41.3 million iPhones during the fiscal third quarter ending June 30, 2018. Net income was $11.5 billion, up 32.1% year-on-year, and gross margin was 38.3%, down about 0.2 percentage points.

Apple has responded to a plateauing global smartphone market by launching ever-more expensive phones and diversifying into services.