July 30 (Reuters) – Apple Inc’s quarterly profit and revenue beat Wall Street targets on Tuesday and its forecast for fourth-quarter sales topped expectations as well, with Chief Executive Tim Cook telling Reuters that “marked improvement in greater China” drove the results.
Services revenue in the fiscal third quarter rose 12.6% to $11.46 billion, a new record, but missed expectations of $11.73 billion, according to IBES data from Refinitiv. Apple CEO Tim Cook told Reuters that after factoring out a one-time payment from lawsuits a year ago and foreign-exchange effects, the services segment growth rate would have been 18%.
China sales fell 4% to $9.16 billion, after declining 22% in the fiscal second quarter. The Chinese smartphone market shipments declined 6% in Apple’s fiscal third quarter, according to market research firm Canalys.
Trade tension between the United States and China have weighed heavily on Apple because it has slowed down economic growth in China, a major market for Apple. Apple effectively cut iPhone prices in China earlier this year after currency exchange rates had made its phones too expensive for many Chinese consumers.