Apple’s race to $1 trillion: iPhone maker delivers record quarter despite flat sales

Apple just reported results for its April-through-June quarter today, and the company’s burgeoning services business is once again the story of the day.

While Apple missed estimates on iPhone sales, services brought in a surprising $9.5 billion in revenue, gaining 31% over the year-earlier quarter.

Overall, revenue was up 17% year-over-year at $53.3 billion, a June quarter record. The company said last quarter that it expected revenues of between $51.5 billion and $53.5 billion. Thomson Reuters analysts expected $52.3 billion.

Earnings per share was up 17% to $2.34, another record for the June quarter.

The services business includes things like Apple Music, Apple Pay, and iCloud. Some of the more bullish Apple analysts believed Apple might report $9.2 billion in services revenue for the June quarter. Tim Cook said in early 2017 that he wants the service business to double its revenue to more than $14 billion a quarter by 2020.

iPhone sales growth was basically flat from last year’s June quarter. Analysts expected that Apple would sell around 42 million phones–the company sold only 41.3 million. The June quarter is seasonally slow for iPhones.

On the plus side, the average selling price (ASP) for iPhones rose to $724, suggesting that the $1,000-plus iPhone X continued to sell well.

The company says it expects to report between $60 billion and $62 billion in revenue next quarter, and that it expects to pay roughly 15% in taxes on it.

Apple’s stock closed Tuesday at $190.29, with a market cap of $935.3 billion. For those watching to see if Apple becomes the market’s first trillion-dollar company today, the stock price will need to hit $203.46. Apple shares were up 2.8% at $195.71 in after-hours trading.