Apple Inc (AAPL – Free Report) posted favorable earnings results in its fiscal second quarter. The good show was driven by impressive iPhone X, iPhone 8 and iPhone 8 Plus sales.
Apple's encouraging earnings results had a positive impact on the tech sector and boosted investor sentiment. Following these promising trends, investing in technology mutual funds with a significant holding in the iPhone maker will be a prudent decision.
Q2 Earnings in Focus
Apple's fiscal second-quarter earnings of $2.73 per share and revenues of $61.14 billion easily topped the respective Zacks Consensus Estimate of $2.69 and $60.99 billion. On a year-over-year basis, earnings and revenues registered growth of 30% and 15.6%, respectively.
Apple benefited from robust iPhone and Services segment revenue growth. iPhone X has been its top-selling phone every week since its launch in November 2017. Apple mentioned that the device was the most popular smartphone in China in the reported quarter. Another iPhone model was also among the top three in the country.
Apple Services' revenues, that constitute 15% of total sales, were $9.19 billion, beating the consensus estimate of $8.33 billion backed by record growth in App Store, Apple Music, iCloud and applecare revenues in the quarter. Total iPhone unit sales of 52.2 million increased 3% year over year on the back of iPhone X, iPhone 8 and iPhone 8 Plus.
Apple Rally Boosts Tech Sector
Apple became the latest tech giant to come up with upbeat earnings and revenue growth levels. Apple's March-quarter earnings are followed by Alphabet Inc.'s (GOOGL – Free Report) 23.5% and Facebook, Inc.'s (FB – Free Report) 49% revenue growth.
Total Q1 earnings for the 444 S&P 500 companies that have reported results already are up 24.5% from the same period last year on 9.3% higher revenues, with 77.7% beating EPS estimates and 75% beating revenue estimates.
In the past one year, the tech sector jumped 23.6%, becoming the best performing sector in the S&P 500. In fact, in the last three months, the tech sector rose 10.1%, higher than the S&P 500's increase of 3.5%. Additionally, mutual funds related to this sector registered strong returns. According to Morningstar, technology mutual funds have returned 27.8% over the last one year.
