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After three quarters in a row of double-digit revenue growth and a 30% year-over-year increase in earnings per share in Apple's (NASDAQ: AAPL) most recent quarter, the bar was set high going into the company's third-quarter fiscal 2018 earnings release. But Apple still managed to deliver some impressive numbers, including another quarter of accelerating revenue growth and a 40% increase in earnings per share.
Here's a look at the top- and bottom-line results, as well as other key takeaways from the quarter, including accelerated year-over-year growth rates in iPhone revenue, big numbers from services and other products, and more.
Image source: Apple.
Apple third-quarter earnings: The raw numbers
| Metric | Q3 2018 | Q3 2017 | Change |
|---|---|---|---|
| Revenue | $53.3 billion | $45.4 billion | 17% |
| Earnings per share | $2.34 | $1.67 | 40% |
| Gross profit margin | 38.3% | 38.5% | N/A |
Data source: Apple's fiscal 2018 third-quarter consolidated financial statements.
Apple's third-quarter revenue was $53.3 billion, up 17% year over year and at the high end of management's guidance range for third-quarter revenue of between $51.5 billion and $53.5 billion. Net income increased 32% year over year, but EPS saw outsize growth of 40%, thanks to Apple's aggressive share-repurchase program.
Speaking of Apple's share repurchases, management said it bought back $20 billion worth of its own shares, bringing Apple's total repurchases in the last two quarters alone to a stunning $43.5 billion.
Segment results
| Product segment | Q3 2018 Revenue | Q3 2017 Revenue | Change |
|---|---|---|---|
| iPhone | $29.9 billion | $24.8 billion | 20% |
| iPad | $4.7 billion | $5.0 billion | (5%) |
| Mac | $5.3 billion | $5.6 billion | (5%) |
| Services | $9.5 billion | $7.3 billion | 31% |
| Other Products | $3.7 billion | $2.7 billion | 37% |
Data source: Apple's fiscal 2018 third-quarter segment data summary.
Apple's iPhone segment continued to benefit from a successful iPhone 8- and iPhone X-fueled product cycle, with iPhone revenue surging 20% year over year, up from 14% growth in Q2. A higher average selling price for Apple's iPhones was the primary driver for this higher segment revenue, as iPhone unit sales only increased 1% year over year during the quarter.
Apple's services and other products revenue sustained their impressive momentum. Apple's second largest segment, services, saw revenue rise 31% year over year to $9.5 billion, while other products revenue soared 37% to $3.7 billion.
Data source: Apple's fiscal 2018 third-quarter segment data summary. Chart by author.