Apple's Q1 crushes estimates as iPhone sales surge

Apple sold 78.29 million iPhones in Q1, which is up 5 percent year over year.

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Image: CNET

Apple handily topped Q1 earnings targets with its highest quarterly revenue ever. The company also set an all-time record for iPhone sales.

The Cupertino, Calif.-based technology giant reported Q1 net income of $17.9 billion, or $3.36 a share. The company made $78.4 billion in revenue.

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Wall Street was expecting first-quarter earnings of $3.22 per share on revenue of $77.38 billion.

"We're thrilled to report that our holiday quarter results generated Apple's highest quarterly revenue ever, and broke multiple records along the way," said Apple CEO Tim Cook. "We sold more iPhones than ever before and set all-time revenue records for iPhone, Services, Mac and Apple Watch. Revenue from Services grew strongly over last year, led by record customer activity on the App Store, and we are very excited about the products in our pipeline."

Apple sold 78.29 million iPhones in Q1, which is up 5 percent year over year. From a revenue perspective that's $54.37 billion in sales for the iPhone in the quarter.

Here's the breakdown for the quarter:

  • iPhones: 78.3 million, up from 74.7 million in the year-ago quarter
  • iPads: 13.1 million million, down from 16.1 million in the year-ago quarter
  • Macs: 5.4 million, down from 5.3 million in the year-ago quarter
  • Services (which includes iTunes and Apple Pay): $7.2 billion.
  • Other products (accessories and Apple Watch are included, but not broken out separately): $4.02 billion.
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Gross margin for the quarter was 38.5 percent compared to 40.1 percent in the year-ago quarter. Apple said international sales accounted for 64 percent of the first quarter's revenue.

Apple's board also declared a cash dividend of 57 cents per share, payable on February 16.

Apple said for the fiscal second quarter that it expects revenue between $51.5 billion and $53.5billion. Wall Street is looking for earnings of $2.09 on revenue of 53.94 billion.

Apple's stock ticked up around three percent in after-hours trading.

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