LIVE: Apple crushes its Q4 earnings

Apple CEO Tim Cook.Apple

Apple topped Wall Street targets across the board in its fiscal fourth quarter, displaying strength across all its product lines on the eve of one of the most anticipated iPhone launches ever.

With $52.6 billion in sales, it not only beat Wall Street expectations, but it also beat its own forecast, which topped out at $52 billion.

Apple shares surged over 3% in after-hours trading.

All three of Apple's major product lines — iPhone, iPad, and Mac computers — reported year-over-year unit sales growth.

Apple also issued strong guidance for its December quarter, which is its strongest quarter. Apple's forecasting between $84 and $87 billion in sales next quarter, which at the midpoint would be 9% higher than last year's $78.4 billion.

Apple also declared a cash dividend of $.63 per share.

Here is what Apple reported:

Q4 EPS (GAAP): $2.07 per share, up 24% year-over-year (y/y), versus Wall Street expectations of $1.87

Q4 Revenue: $52.6 billion, up 12% y/y, versus expectations of $50.5 billion and Apple's own forecast of between $50-$52 billion

Gross margin: 37.9%, flat y/y

iPhone units sold: 46.7 million, up 2% y/y, versus expectations of 46.1 million

iPhone average selling price: $618, flat y/y, versus expectations of $633.

iPad units sold: 10.3 million, up 11% y/y

Mac units sold: 5.3 million, up 10% y/y

Q1 2018 Forecast: $84 billion to $87 billion

Apple's having a good run. Before it reported earnings, its stock was already up 45% so far this year. This quarter's earnings will give a glimpse into the first week of sales for the iPhone 8, one of Apple's newest devices.

But investors will also be looking for color on the iPhone X, Apple's most expensive iPhone, during the company's earnings call. Strong pre-order activity and long backorder times suggests that it could be in short supply this next quarter.

Notes from the conference call:

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5:56: People are spending more time on the App Store and downloading more apps, Luca Maestri says.

5:52: Where does AR show up on the balance sheet? "We tend to focus first and foremost on customer experience. All about the making sure the experience is great. If we get that right, revenues and profits will be a result of that."

5:50: India is "analgous to the many years we put into China. It's building stores, channels, developer ecosystem, having the right product lineup for the market. We're making good progress and gaining understanding, but we still have a long way to go."

5:50: India question. What will unlock the massive market?

5:48: "Truth is we don't know, we put our best estimate into the guidance" Tim Cook says about holiday quarter supply.

5:45: Tim Cook brushes off question about Apple finally innovating. "There's always doubting Thomases" and there will be until he retires.

5:44: Tim Cook compares the price of the $999 iPhone X to "a coffee per day." That's expensive coffee!

5:39: "It's only today that the first customers can look at all three" of the new iPhones, says Tim Cook. "A large number of people pay for the phone by month."

5:38: Apple Music subscriptions up 75% year-over-year, says Luca Maestri.

5:34: You can tell from the average selling price, good success in low and high-end iPhone sales. "Work hard to have an iPhone that's affordable as possible" for people with limited budgets.

5:32: Augmented reality "amplifies human performance" instead of isolating, Tim Cook says. Looking at things in the market and what's coming, it's "all over the place," Cook says. Mentions shopping, gaming, and business productivity apps. "I see apps that make me want to go back to K-12 again."

5:31: Tim Cook mentions that the first iPhone X went on sale in Australia with hundreds waiting in line.

5:28: Follow-up question about China. "Upgraders and Android switchers in China were up year-over-year. Results are broad-based and across the board. Decline we've been experiencing in Hong Kong moderated."

5:27: Question and answer time! First question is about iPhone X demand. Tim Cook: "The ramp for iPhone X is going well, especially considering that it's the most advanced iPhone ... and it has lots of new technologies in it ... we're gonna get as many of them as possible to the customers as soon as possible. I can't predict at this point when that balance will happen."

5:24: Retail traffic up 19% year-over-year, says Luca Maestri.

5:20: Performance for Mac was fueled by demand for MacBook Pro, Apple's most expensive laptop. Educational purchases grew "double digits" year-over-year.

5:17: Loyalty rate for current iPhone owners is 95%

5:14: Now CFO Luca Maestri is speaking.

5:12: "Wearables business" up 75% year-over-year. Includes Apple Watch, Beats, and AirPods. Annual revenue of a Fortune 400 company.

5:10: Apple Watch had unit growth of over 50% for the third straight quarter. Cook says LTE is a "game changer."

5:08: Tim Cook: "AR is going to change the way you use technology forever." 1000 AR apps in the App Store.

5:07: Services revenue reached all-time quarterly record.

5:06: iPhone 8 and iPhone 8 Plus are the two most popular iPhone models and have been since they were released. iPhone X production is going well "especially considering how advanced the product is."

5:05: Tim Cook says India sales doubled year-over-year.

5:05: Tim Cook is giving his prepared remarks. Surprise! Apple had a great quarter.

4:55: We're waiting for Apple to get started.