After the tech giant fell short of iPhone unit sales estimates, Apple’s (NASDAQ:AAPL) growing Services division also failed to meet expectations in the company’s first fiscal quarter of 2018.
Apple, as most investors know, has relied more heavily on iPhone sales in recent years. Therefore, coming in below unit sales expectations during the first quarter its new 10th anniversary iPhone X was on the market isn’t likely to please investors (also read: Apple's First-Quarter iPhone Sales Drop 1%, Miss Estimates).
However, investors have likely noted that Apple began to bolster its Services business over the last few years. Apple’s Services unit now includes segments such as Apple Music, AppleCare, Apple Pay, and licensing.
Coming into Q1, our exclusive non-financial metrics consensus estimate file called for Apple to post $8.649 billion in Services revenues. This projection would have marked a roughly 20.6% year-over-year jump, driven in part, by the growth of Apple Music and its app business.
Apple fell just a bit short of our sales expectations, reporting $8.471 billion in Services revenue. Yet this figure still marked a roughly 18% year-over-year jump.
Services only accounts for less than 10% of Apple’s total quarterly revenues. And regardless of its miss here, Apple did beat both our overall top and bottom-line projections for the quarter, posting earnings of $3.89 per share and revenues of $88.29 billion.
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