Apple’s shares rally despite iPhone sales dropping to lowest in 7 years

Apple has seen its shares jump 4.25 per cent after once again beating analyst expectations during its third quarter, despite iPhone sales dropping to their lowest point in seven years.

For the three months to the end of June the tech giant saw total revenues edge up one per cent to $53.8 billion, coming above expectations of $53.39.

Earnings per share also came above expectations of $2.10 per share, even after falling seven per cent to $2.18 per share during the quarter.

Globally, Apple’s core iPhone range saw sales drop 12 per cent to $25.99 billion, following a 17 per cent drop in the previous quarter, marking the first time in seven years they accounted for less than half of its total revenue.

READ MORE: Apple shares jump 5% despite sharpest ever drop in iPhone sales

Its chief executive Tim Cook has framed the results as a successful shift away from reliance on a single product, following numerous months of struggling iPhone sales.

This was supported by a near 50 per cent growth in revenues from wearables and other accessories, alongside a 12.6 per cent rise in revenues from its services arm to $11.46 per cent, beating previous records despite coming below expectations.

Looking ahead Apple said it expected revenues in the next quarter to come between $61 billion and $64 billion compared to analyst estimates of $61.02 billion.

Notably sales in the world’s largest smartphone market China only dipped slightly, stemming a near freefall in sales seen in the previous few months and quashing many investors’ fears that the looming trade war would hit the company hard.

Outside of iPhone sales, where Apple has struggled to compete with cheaper Chinese rivals like Huawei, the company reported revenue growth in the region.

“We actually grew in mainland China,” Cook told Reuters.

“Non-iPhone revenue grew 17%. We grew in every category outside of iPhone.”

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