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Apple posts record services revenue, solid iPhone sales in Q3

The Cupertino tech giant beat earnings and revenue expectations with its best June quarter ever.

Apple published its third quarter financial results on Tuesday, easily besting market expectations thanks to solid iPhone sales and record revenues from its growing services segment. The results amounted Apple's best June quarter ever and its fourth consecutive quarter of double-digit revenue growth.

The Cupertino, Calif. company posted earnings per diluted share of $2.34, up 40 percent from a year ago. Revenue for Q3 came to $53.3 billion, an increase of 17 percent from the year-ago quarter.

Wall Street was looking for earnings of $2.18 per share on revenue of $52.34 billion.

"Our Q3 results were driven by continued strong sales of iPhone, Services and Wearables, and we are very excited about the products and services in our pipeline," CEO Tim Cook said in a statement.

Apple sold 41.3 million iPhones in the quarter, which is 1 percent higher than a year prior. iPhone revenue, however, came to $29.9 billion -- a 20 percent jump from a year earlier.

Apple sold 11.55 million iPads, which brought in $4.74 billion in revenue -- a 5 percent decline in revenue year-over-year. It sold 3.72 million Macs, bringing in $5.33 billion in revenue -- also a 5 percent decline in revenue.

Services revenue -- an increasingly important part of Apple's business -- came to $9.5 billion, which is 31 percent higher than a year prior.

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In a conference call Tuesday, Cook said Apple is on target to reach its goal of doubling its fiscal 2016 Services revenue by 2020. The results in Services were driven by strong performance in a number of areas, he said. For instance, paid subscriptions from Apple and third parties have now surpassed 300 million, an increase of more than 60 percent in the past year alone.

Meanwhile, the App Store turned 10 years old this month, Cook noted. Based on third-party research estimates, generated nearly twice the revenue of Google Play so far in 2018, he said.

The App Store, Cook said, has "exceeded our wildest expectations, igniting a cultural and economic phenomenon that has changed how people work, learn and play."

As for its geographic segments, revenue from the Americas totaled $24.54 billion, a 20 percent year-over-year increase. Revenues grew 19 percent year-over-year in China, 14 percent in Europe, 7 percent in Japan and 16 percent in the rest of the Asia Pacific.

For Q4, Apple said it is expecting revenue between $60 billion and $62 billion. Analysts have said they are looking for Q4 earnings of $2.65 per share on revenue of $59.57 billion.