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Apple earns $46.9B in revenue on sales of 45.5M iPhones, edging market expectations

Apple on Tuesday revealed the results of its fourth quarter of fiscal 2016, in which the company sold 45.5 million iPhones on its way to $9 billion in net income, coming in just slightly ahead of expectations on Wall Street.

Revenue for the quarter reached $46.9 billion, down from $51.5 billion a year ago, but also ahead of market consensus that Thomson Reuters pegged at $46.89. Earnings per share came in at $1.67, also slightly ahead of Wall Street's expectation of $1.65.

As usual, the iPhone was the main cash cow for Apple. The 45.5 million sold were slightly ahead of what investors anticipated, at 4 million.

But the company also spotlighted its services revenue, which grew 24 percent to an all-time quarterly record of $6.3 billion.

One area where Apple's earnings did disappoint relative to expectations was gross margins —  they were at 38 percent, compared to 39.9 percent a year ago.

The conclusion of the fourth quarter marks the first-ever year where iPhone sales declined compared to the prior. iPhone units were down from 48 million in the same period a year ago.

iPad sales for the quarter were 9.3 million, a 6 percent decrease from a year prior. And the Mac hit sales of 4.9 million, off 14 percent from the same period in 2015.

"Our strong September quarter results cap a very successful fiscal 2016 for Apple," Apple Chief Executive Tim Cook said. "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."

Looking ahead to the first quarter of fiscal 2017, Apple is guiding the following:

  • revenue between $76 billion and $78 billion
  • gross margin between 38 percent and 38.5 percent
  • operating expenses between $6.9 billion and $7 billion
  • other income/(expense) of $400 million
  • tax rate of 26 percent