CUPERTINO, Calif. _ Apple on Tuesday reported quarterly results that were better than expected, as big gains from the company's burgeoning services business helped partially offset a second-straight decline in year-over-year sales of iPhones.
Apple said that for its fiscal third quarter, it sold 40.4 million iPhones, compared with sales of 47.5 million in the same period a year ago. The iPhone remained Apple's single-largest source of revenue, accounting for $24.05 billion in sales during the quarter ended in June.
But even with the decline in iPhone sales, Apple still managed to exceed the estimates of Wall Street analysts, who on average forecast Apple to sell about 40 million iPhones in the quarter.
It was the second-straight quarter in which Apple reported a year-over-year sales decline for iPhones, a trend that has led to speculation about whether Apple's years of rapid growth have come to an end. Apple is expected to hold a company event in September where it will likely unveil the next iteration of the iPhone, which many have already dubbed the iPhone 7.
Overall, Apple turned in a quarterly profit of $7.8 billion, or $1.42 a share, on revenue of $42.4 billion, compared to an earnings of $10.7 billion, or $1.85 a share, on $49.6 billion a year ago. However, Apple managed to beat the estimates of analysts surveyed by Thomson Reuters, who forecast the company to earn $1.39 a share on $42.1 billion in revenue.
The biggest area of growth for Apple came from its services business, which rose 19 percent from a year ago to $5.98 billion. The services business includes sales related to the App Store, Apple Pay, Apple Music and other items.
"We had a tremendous performance from services," said Apple Chief Executive Tim Cook, on a conference call discussing the results. Cook was so upbeat about Apple's services potential that he said he expected services revenue alone "to be the size of a Fortune 100 company next year."
Following the release of its results, Apple shares rose more than 6 percent in after-hours trading to $102.65.
