Apple Q2 Earnings: Robust iPhone X Demand Calms Analyst Fears

Apple has delivered strong iPhone sales in its second quarter, exceeding Wall Street expectations despite declining global demand.

With its newest earnings report, the tech titan put to rest mounting worries about whether the phone’s high price tag would hurt iPhone sales, instead reporting that the iPhone X drove it to record revenue for its second quarter.

“We’re thrilled to report our best March quarter ever, with strong revenue growth in iPhone, Services and Wearables,” said Tim Cook, Apple’s CEO. “Customers chose iPhone X more than any other iPhone each week in the March quarter, just as they did following its launch in the December quarter. We also grew revenue in all of our geographic segments, with over 20% growth in Greater China and Japan.”

iPhone unit sales, while not soaring, held their own. They rose 2.9 percent year over year to 52.2 million phones. That led Apple to project revenue for its fiscal third quarter, which ends in June, that’s largely in line with Wall Street’s expectations.

“iPhone unit sales were better than feared with our recently lowered estimates, and management highlighted consistent results in every geography with the iPhone X the top selling iPhone each week of the quarter,” Canaccord Genuity analyst T. Michael Walkley said.

“We were surprised somewhat that through all of this period of time that the iPhone X winds up as the [best] selling, most popular [device] for every week … since the launch” in November, Tim Cook said Tuesday in a conference call with analysts.

This was a big surprise to many watching the company ahead of earnings, who expected to see iPhone sales crater amid reports that Apple suppliers such as Samsung had drastically cut their projections for the upcoming quarter.

“Cook delivers again despite rampant fears,” noted GBH Insights analyst Daniel Ives, who last week warned Wall Street was in “full panic mode” ahead of Apple’s results. On Tuesday, he said that Apple’s forecast for the June quarter “was much better than feared” and would be a “major relief” for investors.

And while the phone didn’t spark the “supercycle” or huge spike in sales that many expected ahead of its fall launch, it has proven both popular and profitable for Apple – sending revenue from Apple’s iPhone business up 14 percent, to $38 billion.

Check out Apple’s full earnings report here.