06:53 AM EDT, 08/02/2024 (MT Newswires) -- Apple ( AAPL ) reported better-than-expected fiscal third-quarter results, as gains in iPad and Mac sales more than offset a decline in its flagship iPhone product.

The technology giant's earnings came in at $1.40 per share for the three months through June 29, up from $1.26 the year before, topping the Capital IQ-polled consensus of $1.34. Sales increased 5% to $85.78 billion, despite a foreign exchange headwind of 230 basis points, Chief Financial Officer Luca Maestri said during an earnings call late Thursday, according to a Capital IQ transcript. The Street's view was for $84.38 billion in revenue.

Revenue for the company's iPhone decreased to nearly $39.3 billion from $39.67 billion in the prior-year quarter. On a constant currency basis, the product's sales rose versus last year, while the iPhone active installed base "grew to a new all-time high in total and in every geographic segment," according to Maestri.

Mac sales advanced to $7.01 billion from $6.84 billion last year, while iPad jumped 24% to $7.16 billion, driven by the launch of the new iPad Pro and iPad Air, Maestri said. Wearables, home and accessories sales slipped 2% to about $8.1 billion. Services revenue, which includes the App Store and the streaming platform, grew 14% year over year to $24.21 billion.

Apple ( AAPL ) recorded gains across all geographic segments except China, where sales fell 6.5% to $14.73 billion. Revenue in China decreased by "less than" 3% in constant-currency terms, indicating that over 50% of the annual decline was currency-related, Chief Executive Tim Cook said on the call. "That is an improvement from the first half of the fiscal year and so we're happy to see the acceleration," Cook added.

The company anticipates revenue in the September quarter to grow at a rate "similar" to the prior period, with foreign exchange expected to have a negative impact of about 1.5%, Maestri said on the call. "We expect services revenue to grow double digits at a rate similar to what we reported in the first three quarters of this fiscal year," according to the CFO.

"We believe (artificial intelligence) technology being introduced into the Apple ( AAPL ) ecosystem will bring monetization opportunities on both the services as well as iPhone/hardware front and adds $30 to $40 per share," Wedbush Securities said in a late Thursday client note. The brokerage maintained its outperform rating on Apple's ( AAPL ) stock and raised the 12-month price target to $285 from $275.

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