By Emily Bary
Apple Inc. shares were higher in after-hours trading Tuesday, though the company issued a forecast that fell short of already lowered expectations.
The key metric in Apple’s /zigman2/quotes/202934861/composite AAPL +6.98% fiscal first-quarter release was its March-quarter revenue outlook, which came in at $55 billion to $59 billion. The consensus forecast calls for $58.9 billion, far below the $64 billion that analysts had been projecting at the end of December.
The company reported $4.18 per share in earnings for the December quarter on revenue of $84.3 billion. Apple had preannounced the top-line number, calling for $84 billion in a letter to investors that it issued in early January. Analysts surveyed by FactSet had been calling for $4.17 in earnings per share for the quarter.
Shares were up 3.6% in after-hours trading prior to the start of the earnings call.
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Chief Executive Tim Cook said in Apple’s release that while he was disappointed the company fell short of its initial revenue forecast for the holiday period, “this quarter’s results demonstrate that the underlying strength of our business runs deep and wide.” He said Apple has an installed base of 1.4 billion devices, “an all-time high.”
As expected, China proved a weak point during the quarter. Greater China accounted for $13.2 billion of the company’s revenue in the period, compared with nearly $18 billion a year earlier.
Revenue from the company’s iPhone business fell sharply as well, to $52 billion from $61.1 billion in the prior December period. The FactSet consensus called for $52.8 billion for this segment. Apple stopped disclosing unit-sales metrics or average selling prices for its devices, beginning with this quarter’s report.
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Apple’s services revenue exceeded expectations by a hair, coming it at $10.9 billion, compared with estimates for $10.8 billion. This marked the first quarter in which Apple disclosed the gross margin of its services segment: 62.8%, up from 58.3% a year earlier.
Apple shares have fallen 27% over the past three months, while the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.65% , of which Apple is a component, has gained 0.6%.