Apple Reports Strong Growth Despite Higher-Priced iPhones

Apple said sales increased 17% to $53.3 billion overall in its fiscal third quarter, the three month period through the end of June. Profits rose 40% to $2.34 per share, in part due to the big corporate tax cut. Analysts had expected Apple would report $52.4 billion of sales and $2.18 in EPS.

Shares of Apple, already up 13% so far this year, jumped 3% in afterhours trading on Tuesday. With a market cap of over $935 billion at the close of trading on Tuesday, another 7% increase could put the company’s value above $1 trillion (though it could require a slightly greater rise depending on how much stock Apple bought back during the quarter).

Apple’s results avoided the bad reaction given to some other big tech stocks. Netflix and Facebook struggled after reporting earnings earlier this month (with Facebook losing a one-day record $124 billion in market value), while reports from Amazon and Google boosted their share prices.

Apple sold 41.3 million iPhones, only 1% more than in the same quarter a year ago. But by hiking prices last year and introducing the new $1,000 iPhone X, Apple’s iPhone revenue jumped 20% to $29.9 billion. The average selling price also jumped 20% to $724. Many analysts expect Apple may reverse course and lower prices on its new line up later this year. Samsung couldn’t pull off the same trick, as sales of its higher-priced Galaxy S9 came in below expectations in the face of cheaper competition from Huawei and Xiaomi.

Apple’s sales in China also held up during the quarter. Revenue of $9.6 billion from the Greater China region was up 19% rom a year ago. And Apple’s services business, which includes everything from app purchases to iCloud storage fees, gained 31% to $9.5 billion.

As they speak to analysts shortly, Apple (AAPL) execs including tight-lipped CEO Tim Cook likely won’t give investors many hints about what they really want to know–the company’s expectations for its next iPhone update likely arriving in the fall.

Cook did offer a bit of a tease about a forthcoming video service that Apple reportedly is developing. Asked about the company’s production deal with Oprah Winfrey, Cook said Apple is “working on a project that we’re not really ready to share all the details of it yet,” adding “I couldn’t be more excited.”

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