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Apple - Shares rise on stronger than expected sales

George Salmon | 3 November 2017 | A A A
Apple - Shares rise on stronger than expected sales

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Apple delivered fourth quarter sales of $52.6bn, up 12% year-on-year and ahead of its previous guidance of $49bn- $52bn. In US after-market trading, the shares rose 3.1% on the news.

Gross margin dipped slightly on the prior year, to 37.9% in the quarter and 38.5% over the year. However, the increase in revenues, and a slight decrease in the group's tax rate, helped take Apple's Q4 net income up 18.9% to $10.7bn, with the full year figure rising 5.8% to $48.4bn.

Operating cash flow was $15.7bn in the quarter, and $63.6bn in the year.

Apple has declared a Q4 dividend of $0.63, up 10.5% on last year.

Sales split

The iPhone remains the biggest contributor to sales, with $28.8bn of sales in the quarter. Sales were boosted by the launch of the iPhone 8 range, rising 16% on the prior quarter and 2% on the equivalent period last year. Q4 last year included the launch of the iPhone 7.

The Services division contributed $8.5bn, which includes iTunes and the App store, delivered a 34% increase in revenue on last year.

All of Apple's other divisions also delivered strong growth. Compared to the prior year, iPad sales rose 14% $4.8bn, Mac sales increased 25% to $7.2bn, and Other products, such as Apple Watch and TV, rose 36% to $3.2bn.

Guidance

Apple expects revenue in the important first quarter of between $84bn and $87bn, with gross margin between 38% and 38.5%.

Apple CEO Tim Cook said "We're looking forward to a great holiday season, and with the launch of iPhone X getting underway right now, we couldn't be more excited as we begin to deliver our vision for the future with this stunning device."

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