Apple (AAPL - Free Apple Stock Report) shares are trading modestly lower in a weak tape, bouncing around the mid-$160s, on the heels of the tech giant's earnings announcement for the first quarter of fiscal 2018 (year ends September 29th). The Dow component had been a notable market laggard in the days leading up to the report, with rumors circulating that orders were being trimmed for the iPhone X, the premium-tier smartphone that was released in early November. But results for the period were generally positive, highlighted by a 16% jump at the bottom line, to $3.89 a share. This tally, an all-time record, surpassed our $3.75 estimate and Wall Street's consensus view of $3.86.

True, total iPhone shipments slipped 1% during the December interim, to 77.3 million units. (We had been looking for closer to 80 million in unit sales.) The average selling price for the smartphone climbed 15%, however, to $796, thanks to the debut of the iPhone X model, which retails for between $999 and $1,149. This is supporting double-digit revenue growth, and rendering the core iPhone franchise an even greater cash cow. (Cash reserves have swelled to a hefty $285 billion.) And ASP trends should continue to improve, with iPhone X sales apt to account for the largest percentage of the overall smartphone pie as we head through the fiscal year.

Apple's broader ecosystem, meanwhile, including a customer base of about 1.3 billion devices worldwide, continues to expand, which ought to ease investor concerns that the company is too reliant on its iPhone line. Its services business, in particular, where gross margins are much higher than the corporate average, remains quite strong. During the December period, service revenues reached $8.5 billion, up 18% from a year earlier. Moreover, this segment seems poised for many years of brisk growth, as Apple Pay, iCloud storage, and other key offerings gain further traction, and as the company, taking a page out of Netflix's (NFLX) playbook, continues to invest in its own digital content. This suggests that Apple may well become more profitable in time, even as the iPhone platform heads toward maturation.

From a geographic standpoint, the company is becoming more and more diverse, with international sales now accounting for almost two-thirds of the revenue mix. Sales in China, importantly, were up 11% in the first quarter, to roughly $18.0 billion, beating analyst expectations and continuing a rebound that began in the September period. This is in spite of stiff competition from local OEMs. And we would expect China and India, both of which are getting a lot of investment dollars, to be critical markets for Apple through the balance of fiscal 2018 and beyond.

All in all, it was a pretty solid showing from this Silicon Valley heavyweight. And while iPhone shipments this refresh cycle may not be as robust as was originally hoped for (March-quarter revenue guidance was a tad lighter than we envisioned), the fundamental picture for Apple is still very bright. The company will have a lot more money at its disposal, too, owing to the new tax law that allows it to repatriate overseas cash at favorable rates. This could pave the way for more aggressive stock buybacks and dividend hikes (or even acquisitions), though Apple is still considering the best ways to enhance shareholder value. No matter what, we still like this Dow stock for long-term, value-oriented investors. It's suitable for most accounts, and appears to be a relative bargain in today's frothy market.

About the Company: Apple Inc. is one of the world’s largest makers of PCs and peripheral and consumer products, such as the iPod digital music player, the iPad tablet, the iPhone smartphone, and the Apple Watch, for sale primarily to the business, creative, education, government, and consumer markets. It also sells operating systems, utilities, languages, developer tools, and database software. 

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.