Apple beats iPhone sales expectations, but profits, revenues down for third straight quarter

“Peak iPhone” is real. iPhone sales, in general, are on a downward arc, and Apple is looking for ways to fill the gap. Apple’s fiscal Q4 is characterized by soft iPhone sales running up to the release of the new iPhone 7, which was available only for a couple of weeks during that quarter. Here are the highlights:

• Earnings of $9 billion on $46.9 billion in revenue, down from $11.1 billion in earnings on $51.5 billion in revenues in the same quarter last year. Last quarter, Apple earned $7.8 billion on $42.4 billion in revenues. 

• Apple beat analyst estimates for unit sales of iPhone, selling 45.5 million devices in the quarter. But that’s down from the 48 million it sold last year. Morgan Stanley analysts thought Apple would ship 44 million iPhones in the quarter.*

•Apple also sold sold 9.3 million iPads (down from 9.8 million last year), 4.9 million Macs (up from 4.7 million last year). Services revenue was $6.3 billion.

•Gross margin was 38% compared to 39.9% in the year-ago quarter. International sales accounted for 62% of the quarter’s revenue.

*Since the iPhone 7 and iPhone 7 Plus were available for only two weeks of the quarter, we still don’t have a clear picture of the device’s impact. We’ll be listening for Tim Cook’s guidance on that during the earnings call today. Stay tuned.