iPhone sales beat expectations for Q4, Apple reports

While iPhone sales were down from last year, Apple nevertheless posted better-than-expected earnings.

Apple reported fourth quarter results on Tuesday, posting better-than-expected iPhone sales, and slightly beating earnings and revenue expectations. The company also gave a stronger-than-expected outlook for the first quarter of fiscal 2017.

The Cupertino technology giant posted earnings of $1.67 a share on revenue of $46.9 billion. Wall Street was expecting earnings per share of $1.65 on revenue of $46.89 billion. The company sold 45.5 million iPhones -- down 5 percent year-over-year but still beating expectations of 45 million in sales for the quarter. This was the first quarter to reflect sales of the new iPhone 7 (though it included only the first two weeks of sales).

On a conference call Tuesday, CEO Tim Cook said with respect to the smartphones, "From a worldwide point of view, the truth is demand is outstripping supply... particularly on the iPhone 7-plus."

Over the same period last year, Apple earned $1.96 a share on revenue of $51.5 billion and sold 48 million iPhones.

"Our strong September quarter results cap a very successful fiscal 2016 for Apple," Cook said in a statement. "We're thrilled with the customer response to iPhone 7, iPhone 7 Plus and Apple Watch Series 2, as well as the incredible momentum of our Services business, where revenue grew 24 percent to set another all-time record."

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Services revenue reached $6.3 billion -- it was the only segment to show year-over-year revenue growth. Sales of iPads nearly hit 9.3 million, which was down 6 percent from the previous year but slightly above expectations. Sales of Macs were at nearly 4.9 million, down 14 percent year-over-year and slightly below expectations.

As for various operating segments, revenue in the Americas fell 7 percent annually, while Europe revenue rose 3 percent and Japan rose 10 percent. Revenue from Greater China fell 30 percent. However, Apple CFO Luca Maestri said he expects performance in greater China to improve on a quarter-to-quarter basis because of the iPhone 7 and 7-plus.

For the first quarter of fiscal 2017, the company is projecting revenue between $76 billion and $78 billion. Wall Street has projected an EPS of $3.17 for Q1 2017 on revenue of $74.65 billion.

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