Apple Beats Fiscal Q4 Earnings Estimates, as Wall Street Eyes Huge iPhone Sales Pipeline

Apple handily topped analyst expectations for its September quarter, as the tech giant reported sales of 39.3 million iPhones — and Wall Street anticipates an even bigger surge for the smartphone business during the 2014 holiday shopping season.

The company posted revenue of $42.1 billion and earnings per share of $1.42 for fiscal fourth quarter of 2014, which ended Sept. 27. Financial analysts’ consensus estimates for the period were $39.9 billion in revenue and $1.31 EPS, per Thomson Reuters.

In the most recent quarter, Apple bowed two new larger-size smartphone models — the iPhone 6 and 6 Plus — and the company boasted a record 10 million units sold the first weekend they went on sale in mid-September.

Analysts expect Apple to deliver record-breaking iPhone sales in the current quarter, given that the new models were available during only two weeks of its fiscal Q4 and weren’t available in all international markets.

In the December quarter, Apple could sell 73 million to 75 million iPhones worldwide, according to estimates from Rosenblatt Securities’ Brian Blair; others were more conservative, with Piper Jaffray’s Gene Munster forecasting unit sales of 56.7 million-62.7 million. Apple scored its biggest quarter for iPhone sales in the three months ended Dec. 28, 2013, when it sold 51 million smartphones.

Sales figures for iPad were less rosy: Apple said it sold 12.3 million of the tablets in the most recent quarter, down 13% from 14.1 million in the year-earlier period. Last week, Apple unveiled two new iPad tablets — the iPad Air 2 and iPad Mini 3 — which went on sale online Oct. 17.

For its first fiscal quarter of 2015, Apple said it expects revenue of $63.5 billion-$66.5 billion, up in the double-digits vs. $57.6 billion in Q1 2014. The company also announced a cash dividend of 47 cents per share payable to common-stock shareholders on Nov. 13.

Apple CEO Tim Cook, on a call with analysts Monday, acknowledged that demand for the iPhone 6 and iPhone 6 Plus is outstripping supply — reiterating that the new smartphones represent its fastest product ramp in history. But, he said he was confident supply would catch up, pointing to Apple’s revenue guidance for fiscal Q1 2015. “At this point, we’re selling everything we make,” Cook said.

Meanwhile, the Apple Pay mobile-payment service went live Monday in the U.S. via the iOS 8.1 update. Apple Pay supports credit and debit cards from American Express, MasterCard and Visa issued by major banks, with multiple retailers opting into the service.

The company did not provide any updates on the Apple Watch, its first foray into the wearable-computing segment, saying only that the product is expected to launch in early 2015.

Also on the earnings call, Apple said that starting with its fiscal first-quarter 2015 results, it will revise its reporting segments. The company will continue to break out iPhone, iPad and Mac figures, but eliminate the “retail” category. The “services” segment will include iTunes, software and services, including content, apps and licensing as well as Apple Pay. An “other products” segment will encompass Beats, Apple TV, iPod, Apple Watch, and peripherals and accessories.

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