For the third time this fiscal year Apple has set a record for its growing services business that includes iCloud, Apple Music, Apple Arcade, AppleCare, Apple Card, Apple TV+, and more. The company also eclipsed analysts’ expectations for revenue and EPS.
Hamza Shaban for Yahoo Finance:
Investors appeared to take the bad news more seriously than the good. Shares dropped nearly 5% on Friday to close at $181.99.
Services was among the key metrics that surpassed analysts’ expectations, coming in at more than $21 billion, up 8% from the year-ago period. Apple also beat expectations for overall revenue and earnings per share. The company touted its installed base of 2 billion active devices. But even those bright spots weren’t enough to satisfy the Street.
Some analysts brushed aside the instant market reaction and highlighted the company’s strengths. When compared to Android’s marked decline in sales, for instance, the relatively flat sales of iPhones look healthy, Oppenheimer analyst Martin Yang told Yahoo Finance Live. “The services story is going to be the long-term growth driver for Apple,” he said.
Wedbush analyst Dan Ives also emphasized the bright side. “The star of the show was Services revenue,” he said in a note on Friday. He added that services is set to accelerate to double-digit growth and “remains key to Apple’s overall re-rating and growth story.”
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