The tech sector has performed favorably in recent times on the back of encouraging earnings results. Tech behemoth Apple Inc. (AAPL – Free Report) witnessed strong performance on the back of robust fiscal third-quarter earnings results. Higher iPhone average selling price boosted revenues for the quarter and eventually earnings. Following these promising trends, investing in technology mutual funds with a significant holding in the iPhone maker and other tech giants will be a prudent decision.
Q1 Earnings in Focus
Apple’s third-quarter fiscal 2018 results created new records in a seasonally slow quarter. Earnings of $2.34 per share not only crushed the Zacks Consensus Estimate by 17 cents but also surged 40.4% year over year. Net sales increased 17.3% year over year to $53.27 billion, which surpassed the Zacks Consensus Estimate of $52.34 billion. Apple benefited from robust iPhone and Services segment revenue growth.
Total iPhone unit sales of 41.30 million beat the Zacks Consensus Estimate and inched up 1% year over year on the back of iPhone X, iPhone 8 and iPhone 8 Plus. Revenues from iPhone (56.1% of sales) grew 20% from the year-ago quarter to $29.91 billion, while services revenues surged 31% year over year.
Apple Rally Boosts Tech Sector
On Aug 2, tech behemoth Apple reached the milestone since its inception 42 years ago. Apple got a boost from strong quarterly earnings, following a significant boost in services revenues and an increase in revenues from iPhone sales.
As of Aug 1, total earnings for the technology sector are up 35% on 12.9% higher revenues, with 89.7% beating EPS estimates and 87.2% beating revenue estimates.
The tech sector has jumped 14.3% so far this year, becoming the best performer among the S&P 500 sectors. Additionally, mutual funds related to this sector registered best returns among all the sector equity fund categories. According to Morningstar, technology mutual funds have returned 14.6%, year to date.
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