Apple Profit, IPhone Sales Top Street

(RTTNews) - Apple Inc. (AAPL) reported its third straight quarter of iPhone sales and revenue declines after the market closed on Tuesday. The tech giant's fourth-quarter profit trumped Wall Street expectations, while revenues fell short.

Although, Apple reported its third straight year-over-year decline in iPhone sales, it sold 45.5 million iPhone units during the quarter, generating $28.16 billion in revenues. Analysts were expecting iPhone sales volume to be 44.8 million.

Sale of iPhones may have been slightly fueled by the Samsung Galaxy Note 7's exploding fiasco, which might have prompted many high-end Android smartphone users to switch to iPhones.

Apple's bottom line continues to be buoyed by iPhone sales, as it contributes about two-thirds of Apple's revenues and a major part of its profit.

Apple launched iPhone 7 on September 16. Although, the fourth quarter results represent some iPhone 7 sales, the holiday quarter would be crucial for the iPhone 7. Apple expects revenues to start growing again next quarter driven by huge demand for the iPhone 7.

The sales of iPhones have slowed down reflecting mainly a saturated smartphone market, sluggish demand in China -- Apple's second-biggest market after the U.S, and less frequent upgradation of iPhones by customers.

Apple's fourth-quarter profit dropped to $9.01 billion or $1.67 per share from $11.12 billion or $1.96 per share last year. Analysts had expected the company to earn $1.65 per share, according to figures compiled by Thomson Reuters.

Apple said its revenue dropped to $46.85 billion from last year's $51.50 billion. Analysts had predicted revenues of $46.89 billion.

Gross margins narrowed down to 38 percent from 39.9 percent last year.

"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," said Tim Cook, Apple's CEO.

Looking forward to the first quarter, Apple expects revenue between $76 billion and $78 billion. Analysts currently project revenues of $74.98 billion.

AAPL closed Tuesday's trading at $118.25, up $0.60 or 0.51%, on the Nasdaq. The stock, however, dropped $2.55 or 2.23% in the after-hours trade.