Apple Surprises Street, Posts Top And Bottom Line Beat

Tech titan Apple INc. AAPL released its fiscal Q3 earnings results after Tuesday's closing bell, beating analysts' estimates on both the top and bottom line. While earnings and sales topped Wall Street expectations, sales across the company's product lines continued decline and Apple also reported a sharp drop in revenue in China.

Leading up to the key report, Apple shares had been falling both year-to-date and on a 52-week basis. In 2016, the stock has shed a little more than 8 percent and over the past year, shares have fallen more than 22 percent.

The company reported earnings of $7.8 billion or $1.42 per share, which compares to Wall Street consensus EPS estimates of $1.38. The high estimate was $1.47 with a low estimate of $1.23. This represents a decline of 27 percent from the $1.85 that Apple reported in last year's third-quarter. The company reported quarterly revenue of $42.36 billion, beating analysts' estimates. Sales in the period were expected to be $42.09 billion, with a high estimate of $43.7 billion and a low estimate of $40.72 billion. Last year, the company reported revenue of $49.6 billion in the fiscal third-quarter.

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Apple reported its first decline in year-over-year quarterly sales since 2003 in Q2 2016, when iPhone sales fell 16 percent. Both iPad and MacBook sales also fell by double digits in Q2. In the most recent quarter, iPhone sales were down 15 percent to 40.4 million and total revenue fell by 14.6 percent.

Other notable highlights of the report include a 33 percent year-over-year decrease in China sales, including a 29 percent sequential drop. The company's services business, a growth area for Apple, generated nearly $6 billion in sales, a 19 percent year-over-year increase.

Looking ahead, Apple guided for fiscal Q4 revenue of $45.5 billion to $47.5 billion. This compares to current Wall Street consensus revenue estimates of $45.71 billion for Q4.