Apple Q3 beats Wall Street estimates, despite falling iPhone sales

Apple was expected to make $1.39 per share on revenue on $42.1 billion.

iphone.jpg

(Image: CNET/CBS Interactive)

It might've been a quiet quarter for the technology super-giant, but Apple was still able to satisfy Wall Street's expectations for the last three months.

That's despite falling iPhone and iPad sales, and a flat services segment.

The Cupertino, Calif.-based technology giant reported quarterly profit of $7.8 billion, or $1.42 cents a share (statement). The company made $42.4 billion in revenue.

Wall Street was expecting the company to report $1.39 per share on revenue on $42.1 billion.

So that's a win on both accounts.

Here's the breakdown for the quarter

  • iPhones: 40.39 million, down by 21 percent on the year-ago quarter
  • iPads: 9.95 million, down by 3 percent on the year-ago quarter
  • Macs: 4.25 million, down by 11 percent on the year-ago quarter
  • Services (which includes iTunes and Apple Pay): $5.97 billion, which is flat compared to the year-ago quarter.
  • Other products (accessories and Apple Watch are included, but not broken out separately): $2.2 billion, up 1 percent on the year-ago quarter

Apple chief executive Tim Cook seemed upbeat nonetheless. In prepared remarks, he said that the company saw "stronger customer demand and business performance than we anticipated at the start of the quarter."

Apple said its gross margin was hovering around the 38 percent mark, down slightly from earlier this year when it was a little over 40 percent.

Meanwhile, international sales accounted for 63 percent of the first quarter's revenue, with Europe pulling its weight with a little under $10 billion in revenue.

The company said it expects revenue between $45.5 billion and $47.5 billion for the current fiscal fourth quarter.

(Screenshot: ZDNet/CBS Interactive)

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