Apple shares rise 3% as boost in services revenue overshadows iPhone miss

Apple's overall revenue rose 4% in its first fiscal quarter, but it missed on Wall Street's iPhone sales expectations and saw sales in China decline 11.1%, the company reported Thursday. 

But shares rose about 3% in extended trading after the company gave a forecast for the March quarter that suggested revenue growth.

Here's how Apple did versus LSEG consensus estimates for the quarter that ended Dec. 28. 

Apple said it expected growth in the March quarter of "low to mid single digits" on an annual basis. The company also said it expected "low double digits" growth for its Services division. Apple said it expected the strong dollar to drag on Apple's overall sales about 2.5%, and after accounting for currency, the overall growth rate would be similar to the December quarter's 6%.

Wall Street was expecting guidance for the March quarter of $1.66 in earnings per share on $95.46 billion in revenue. 

Apple's profit engine, its Services division, which includes subscriptions, warranties and licensing deals, reported $23.12 billion in revenue, which is 14% higher than the same period last year. Apple CEO Tim Cook told analysts on a call Thursday that the company had more than one billion subscriptions, which includes both direct subscriptions for services such as Apple TV+ and iCloud, as well as subscriptions to third-party apps through the company's App Store system.  

Although Apple's overall sales rose during the quarter, the company's closely watched iPhone sales declined slightly on a year-over-year basis. The December quarter is the first full quarter with iPhone 16 sales, and Apple released its Apple Intelligence AI suite for the devices during the quarter.  

Apple's iPhone miss versus LSEG estimates was the biggest for the