Apple snapped a sliding revenue line in the third quarter driven by continued growth in services. However, revenue from Apple's flagship hardware division went down over the year as the tech giant is preparing for its next iPhone release.
Apple met analysts' expectations of both sales and profits, and shares in the company rose more than 3 percent in after-hours trading.
Revenue: Apple generated $ 53.8 billion in sales, up 1 percent and ahead of analysts' expectations of $ 53.39 billion. Revenues from the services division grew 13 percent to $ 11.45 billion. The product division raised $ 42.3 billion in revenue for the quarter, down 1.8 percent from a year ago.
Profit: Apple beat analyst expectations of $ 2.10 per share in profit and reported net income of $ 10 billion, or $ 2.18 per share.
Looking ahead: Apple posted better-than-expected guidance for the crucial fourth quarter, which usually includes the latest iPhone release. Apple expects revenue of $ 61 to $ 64 billion in the fourth quarter, compared to analyst expectations of $ 61.02 billion.
While Apple posted disappointing iPhone sales, revenue guidance for the next quarter (then the new iPhone launch) was higher than expected. Splits up 3.3% in demand trading. $ AAPL
– Roger Cheng (@RogerWCheng) July 30, 2019
“This was our largest June quarter ever – driven by record revenue from services of all time, accelerating Wearables growth , strong performance from iPad and Mac, and significant improvement in iPhone trends, Apple CEO Tim Cook said in a statement. "These results are promising across all of our geographical segments, and we are confident of what's ahead. The balance of calendar 2019 will be an exciting period, with major launches across all of our platforms, new services and more new products." 19659003] Despite revenue from record services Cook highlighted, division growth is slowing.  looks like Apple had the slowest growth in services in almost four years in Q3 https://t.co/1sQblj13WZPO19659003 ?? – Jordan Novet (@jordannovet) July 30, 2019
Apple immerses in the huge cash reserves with the acquisition of Intel's billion-dollar smartphone modem earlier this week, allowing Apple to develop its own modems for faster 5G [iPhone]
Apple's revenue fell year over year over the past two quarters, Cook warned investors early this year that China's weakening economy and trade tensions with the United States weighed in on the company's revenue The company has also seen fewer iPhone upgrades than expected.
Apple has unveiled a number of new products and services over the past few months as it appears to be building on growing service revenue and updating existing products to juice the hardware side.  At the end of March, Apple unveiled a streaming service called Apple TV +, a magazine subscription offering Apple News +, Apple Arcade game streaming service and an Apple-branded credit card that works with Apple Pay and will be released in August.