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Apple’s iPhone sales edged past most analysts’ expectations in its fiscal fourth quarter, thanks in part to strong initial response to the iPhone 6 and iPhone 6 Plus, and the company projected a happy holiday quarter ahead of Wall Street estimates.
CEO Tim Cook hinted at impressive results last week, when he said the newly introduced larger-screen devices “have become the fastest-selling iPhones in history.”
Now the results are in: Apple sold nearly 39.3 million iPhones in the quarter that ended in September, even though it included only a couple of weeks of iPhone 6 sales in a limited number of countries. Analyst estimates ranged from a low of about 35 million to a high of 40 million, with most falling in the 37 million to 38 million unit range.
“At this point, we’re selling everything we make,” Cook said in a call Monday with investors, adding that demand for the iPhone 6 and 6 Plus is outstripping supply.
Those strong iPhone sales helped fuel record revenue and earnings for the quarter.
Apple reported a profit of $8.5 billion, or $1.42 a share, on sales of $42.1 billion. Wall Street predicted earnings of $1.31 per share on revenue of $39.85 billion, according to a survey of analysts by Thomson Reuters.
For the current quarter — which runs through December and includes the all-important holiday season — Apple forecast revenue of $63.5 billion to $66.5 billion, above Wall Street’s expectation of $63.4 billion, according to Thomson Reuters.
“With amazing innovations in our new iPhones, iPads and Macs, as well as iOS 8 and OS X Yosemite, we are heading into the holidays with Apple’s strongest product lineup ever,” Cook said in a statement. “We are also incredibly excited about Apple Watch and other great products and services in the pipeline for 2015.”
Sales of iPads continued to decline in the fourth quarter, amid continued softness in the market for tablets. Apple sold 12.3 million units, in line with analyst projections. A year ago, Apple sold 14 million iPads.
“I know there’s a lot of negative commentary in the market now,” Cook told analysts, in response to a question about sinking iPad sales.
Cooked acknowledged cannibalization is a factor — that people buy an iPhone or a Mac instead of a tablet. “I’m fine with that,” he said. But he dismissed claims that the market is tapped out, noting that in six of the biggest revenue-producing markets, half of those who buy an iPad do so for the first time.
“I’m very bullish on where we can take the iPad over time,” Cook said. “We’re continuing to invest in the product pipeline.”
The Cupertino, Calif., tech giant reported sales of 5.5 million Macintosh computers, exceeding analysts’ forecasts of 4 million to 5 million units in the quarter. The company seta quarterly sales milestone (fueled by back-to-school laptop purchases) at a time when the category is contracting.
The Apple Watch, which was announced in September, will not be available until next year. Once sales commence, Apple will report the results in a catch-all “other” category that includes proceeds from sales of iPods, Apple TV devices and Beats by Dre headphones.
It’s an accounting maneuver designed to protect Apple Watch sales numbers from rivals’ prying eyes, Cook acknowledged, noting, “Our competitors are looking for it.”
Update, 3:50 pm PT includes comments from Apple’s earnings call with investors.
This article originally appeared on Recode.net.
