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Apple, Inc.'s Growth Accelerates in a Blowout Quarter

By Daniel Sparks - Updated Nov 3, 2017 at 1:40PM

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Double-digit growth in revenue and earnings per share show how Apple is firing on all cylinders.

If investors had any doubts about Apple's (AAPL -0.09%) ability to continue growing its business since returning to growth in its first fiscal quarter of 2017, Apple's huge fiscal fourth-quarter results should have put lingering concerns to rest. Not only did Apple's business grow, but its top- and bottom-line growth accelerated.

Apple's business benefited from an increase in iPhone, iPad, and Mac sales, as well as surging revenue in Apple's services and other products segments. Here's a closer look at the results, as well as management's bullish outlook for its holiday quarter.

iPhone X display being splashed in water

iPhone X. Image source: Apple.

Apple earnings: The raw numbers


Q4 2017

Q4 2016

Year-Over-Year Change


$52.6 billion

$46.9 billion


Earnings per share




Gross profit margin



(10 basis points)

Data source: Apple's fiscal fourth-quarter earnings release. Table by author.

With double-digit year-over-year growth in both revenue and earnings per share, Apple demonstrated both operational excellence and popularity with customers. Revenue climbed 12.2% year over year to $52.6 billion, while earnings per share soared 24% to $2.07.

Apple's profit margin held strong at 37.9%, almost in line with its gross profit margin of 38% in the year-ago quarter.

Revenue was above management's guidance for fourth-quarter revenue of $49 to $52 billion, and Apple's gross profit margin was at the high end of a guidance range for 37.5% to 38%.

As Apple CFO Luca Maestri was careful to note in the company's press release, the results marked Apple's fourth consecutive quarter of accelerating revenue growth.

"We're happy to report a very strong finish to a great fiscal 2017, with record fourth quarter revenue, year-over-year growth for all our product categories, and our best quarter ever for Services," said Apple CEO Tim Cook about the quarter.

Segment results

Though iPhone accounted for about 55% of Apple's total revenue, it was by far the company's slowest-growing segment. Here's a review of Apple's segment results.

Product Segment

Q4 2017 Revenue

Q4 2016 Revenue

Year-Over-Year Change


$28.8 billion

$28.2 billion



$4.8 billion

$4.3 billion



$7.2 billion

$5.7 billion



$8.5 billion

$6.3 billion


Other products

$3.2 billion

$2.4 billion


Data source: Apple's fourth-quarter operating data. Table by author.

Notably, Apple's two fastest-growing product segments -- services and other products -- both accelerated significantly in Q4. Year-over-year growth for services and other products in Q3 was 22% and 23%, respectively.

Apple Orchard Road store in Singapore

Image source: Apple.


Another bright spot in Apple's fourth-quarter earnings release was management's optimistic guidance for the company's first quarter of fiscal 2018. Corresponding with the holiday season, the quarter is seasonally Apple's biggest, so investors pay particularly close attention to Apple's outlook for the quarter every year.

Apple guided for record fiscal first-quarter revenue to be between $84 billion and $87 billion. The midpoint of this guidance range represents about a 7% year-over-year increase compared to Apple's record revenue in the year-ago quarter. With management expecting about $7 billion more in revenue in Apple's fiscal first quarter of 2018 compared to its fiscal first quarter of 2017, its new iPhones are clearly off to a running start.

Apple's holiday quarter is poised to benefit from a robust suite of new Apple products, including the new iPhone 8 and 8 Plus, Apple Watch Series 3, Apple TV 4K, and the iPhone X. Apple's flagship iPhone X notably arrives at Apple stores tomorrow.

Daniel Sparks owns shares of Apple. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.

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