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Apple blows past revenue and earnings estimates

Apple (AAPL) stock rose in after-hours trading Monday on news that revenue and earnings for last quarter bested analyst expectations. Revenue was $42.1 billion, and net profit was $8.5 billion, or $1.42 per diluted share.

That compared with $37.5 billion revenue and $7.5 billion profit last year. Average analyst estimates were $39.85 billion revenue and $1.31 profit per share.

"Our fiscal 2014 was one for the record books, including the biggest iPhone launch ever with iPhone 6 and iPhone 6 Plus," Apple CEO Tim Cook said in a statement.

Apple's next-quarter revenue guidance of between $63.5 billion and $66.5 billion would dwarf last year's holiday season record revenue. The company also declared 47 cent per-share cash dividend.

After the earnings were released late Monday, Apple shares rose around 1.5 percent, or $1.44, to $101.20 after closing up $2.09 to $99.76 in regular trading.

The iPhone 6, with the larger screens that could compete with offerings from Samsung and others, were the true engine for the financial success. The figure below shows unit product sales from fiscal year 2012 through fiscal year 2014. The black lines show trends for the iPhone and iPad.


In addition to the high volume, the average sales price for the iPhone was nearly $603, a significant increase from the $571 of the previous year. The higher price meant more revenue and more profit per sale.

Mac computer unit sales were also up, but iPads continued their disappointing decline. One possible reason is that the announcement of new tablet versions came after the end of the quarter, and consumers were likely waiting to see what was new.

Another factor is that large-screen smartphones may be reducing the interest in consumers using yet another device, such as a tablet, as well. In addition, tablets don't receive the up-front subsidy that wireless carriers offer for phones, which masks the phones' full cost to the consumer.

The results show the increased importance of other products and services, such as Apple Pay mobile payments, the upcoming Apple Watch and other potential offerings, that might take some of the pressure from Apple's continued dependence on iPhone sales performance.

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