The tech giant reported earnings of US$2.91 per share on revenue of US$62.9 billion, ahead of Wall Street estimates of US$2.78 EPS on revenue of $61.57 billion.
Shares of Apple were down nearly 6.5% to US$208.09 in Thursday pre-market trading.
iPhone sales missed the mark, totaling 46.89 million units compared with analyst estimates of 47.5 million.
Although iPhone sales missed, the average selling price of an iPhone was US$793, above the forecast of US$750.78.
Nevertheless, Apple announced post-earnings that it would no longer report iPhone sales numbers.
Oppenheimer analysts stated that “Apple no longer has the market or country tailwinds to drive significant iPhone growth,” citing the longer replacement cycle as a factor.
However, the analysts cited Apple’s ability to monetize its user base via its services segment.
The fast-growing category, which includes Apple Music, Apple Care, iCloud and the App Store, reported revenue of US$9.98 billion, slightly below analyst expectations of US$10.2 billion.
Oppenheimer reiterated a Perform rating on Apple’s shares.
Wedbush analysts felt they had the rug pulled out from under them when Apple announced it would no longer provide unit metrics, a key piece of information for those following the tech titan, but will maintain its bullish stance.
The nearly US$800 average selling price per iPhone and a services segment climbing towards US$50 billion by fiscal year 2020 were enough for the analysts to stand their ground.
Wedbush’s analysis found that 350 million iPhones may be upgraded over the next 12 to 18 months, stating that Apple needs to “to capture a majority of these units as part of this upgrade cycle to make a clearly successful iPhone product cycle in 2019 and lay the groundwork for future services/software growth and steady iPhone demand over the coming years.”
Wedbush reiterated an Outperform rating with a price target of $310.