By Emily Bary
Apple Inc. shares ticked higher in aftermarket trading after the company posted record quarterly results for its holiday quarter Tuesday afternoon while easily topping expectations.
The star of the quarter was the iPhone, as revenue for the category exceeded the FactSet consensus by more than $4 billion. Apple /zigman2/quotes/202934861/composite AAPL -0.68% also saw strong performance once again from its wearables, home and accessories category, with revenue up 37% to $10.01 billion, another beat relative to the consensus view.
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Strength in those two segments made up for a disappointing performance from the services business and helped carry Apple to record earnings and revenue. The company netted $4.99 a share for the quarter on revenue of $91.82 billion, whereas analysts had been calling for $4.54 a share in earnings and $88.48 billion in revenue.
Revenue from iPhones totalled $55.96 billion and made up more than half of the company’s overall sales once again, increasing more than 7% from a year ago. Analysts had been calling for $51.38 billion from the category. It was the second-highest quarterly iPhone revenue total in Apple’s history, behind its 2017 holiday quarter.
On the wearables side, Cook discussed how strong demand impacted availability of the Apple Watch and AirPods during the holiday period. Nonetheless, this marked the first quarter in which revenue for the category exceeded $10 billion.
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Shares were up 1.4% in after-hours trading as the company gave a revenue forecast for the current quarter than came in ahead of the consensus view. Apple projects $63 billion to $67 billion in revenue for the March quarter, whereas analysts were expecting $62.41 billion.
Apple’s revenue range is wider than it might normally be, executives said, as the company continues to monitor the coronavirus situation in China. Chief Executive Tim Cook said on Apple’s conference call that the company does have suppliers based in Wuhan but has alternate sources for those pieces of the supply chain. There’s less clarity around the situation in other Chinese cities as several have delayed their holiday shutdowns by an extra week as the outbreak continues to spread.
“We factored our best thinking in the guidance that we provided you,” Cook said, while also flagging that retail traffic throughout the country has been impacted in recent days.
Read: Apple suppliers caution coronavirus could impact planned production hike, says report
Apple managed to improve its China performance in the recently completed quarter, growing sales to $13.58 billion, up 3% from a year prior. It marked a change in tone from a year ago, when the company blamed weakness in China and other emerging markets for its disappointing holiday-quarter results.
Though the services business was a high point of Apple’s results three months back, revenue for the segment fell short of expectations this time around, as Apple booked $12.72 billion in sales, below the $13.06 billion consensus.
Newly launched services such as Apple TV+ didn’t have much impact on the December-quarter results, executives said on the call, while providing additional information as to how the company accounts for deferred revenue around free trials of the service.
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Apple shares have gained 27% over the past three months, as the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +2.17% , of which Apple is a component, has added 6.1%.