SAN FRANCISCO (AP) — Apple is still running a well-oiled moneymaking machine despite cooling demand for its hottest product, the iPhone.
Sales and revenue in the July-September quarter exceeded analyst estimates as Apple's newest iPhones got off to a better start than expected, even though the devices aren't that much different last year's models.
Apple said Wednesday that revenue rose 2% from the same time last year to $64 billion, even as iPhone revenue dropped 9%. Apple's profit dipped 3% to $13.7 billion, but the earnings per share of $3.03 topped analyst projections.
In another encouraging sign, Apple's sales in China continued to recover from a sharp drop-off earlier this year. That helped ease worries that Apple might be bruised by President Donald Trump's trade war with the world's most populous country.
Apple also signaled its confidence that the momentum will continue in the current quarter, which spans the crucial holiday season. The Cupertino, California, company projects revenue will climb by about 4% from the same time last year.
Part of that growth will likely come from a hotly anticipated video streaming service called Apple TV Plus. It's scheduled to debut Friday to compete against industry pioneer Netflix and a slew of new entrants, including Disney Plus and HBO Max.
Add it all up, and it becomes easier to see why the stock market's sentiments about Apple have changed dramatically since the company warned earlier this year that iPhone sales were falling, especially in China. That flop coming out of last year's holiday season made it clear that the iPhone was losing some of its luster, raising fears that Apple's best days might be behind the company.
Those worries hammered Apple's stock, driving down the price to $142 in early January.
But the stock has been setting new highs this month as investors began to realize Apple CEO Tim Cook had crafted an effective strategy to counteract the waning demand for new iPhones. The stock's recovery translates to a nearly $500 billion swing in fortune for Apple's shareholders as the company's market value has soared back to $1.1 trillion — roughly the same level as its long-time rival, Microsoft.
Apple shares increased $3.24 to $246.50 in Wednesday's extended trading after Apple revealed its fiscal fourth-quarter financial report.