Apple (NASDAQ:AAPL) announced its third-quarter results on Thursday, surpassing Wall Street expectations, thanks to a significant boost in services revenue, which helped counterbalance a dip in iPhone sales amid intensifying competition in China. Following positive results, Apple shares gained more than 2% intra-day today.
For the quarter, Apple reported earnings per share (EPS) of $1.40, on revenue of $85.8 billion. This exceeded the forecasts of analysts, who had predicted an EPS of $1.35 and revenue of $84.45 billion.
The company’s revenue saw a 5% increase, primarily driven by robust growth in its services segment, which mitigated the slight decline in iPhone sales.
Sales of Apple’s flagship iPhone, which continues to account for nearly half of the company’s total revenue, decreased to $39.30 billion from $39.67 billion in the same quarter last year. However, this figure still surpassed analysts’ expectations of $38.81 billion.
The services segment achieved a record high, with revenue climbing 14% to $24.21 billion, surpassing Wall Street’s estimate of $24.01 billion.
In China, however, Apple faced a 6.5% decline in sales, amounting to $14.72 billion. The iPhone has been contending with increased competition from local smartphone manufacturers, including Huawei, in this critical market.