The bar was high in advance of Apple's (NASDAQ:AAPL) fiscal fourth-quarter earnings release. The stock was up more than 50% year to date going into the report, and Wall Street has been particularly unforgiving to tech companies in recent months, selling off at the slightest signs of weakness. Apple shareholders were pleased that the results didn't really give bears anything notable to feast on.

For the quarter ended Sept. 28, Apple delivered revenue of $64.04 billion, up 2% year over year, in line with the high end of management's guidance and beating analysts' consensus estimates by about $1 billion. As expected, net income fell by about 3%, but Apple's relentless share buybacks, totaling $18 billion this quarter, helped boost earnings per share to $3.03, up 4% compared with the prior-year quarter, and topping expectations of $2.83. 

Headline numbers aside, here are three key takeaways from Apple's blockbuster results.

A number of Apple iPhone 11 smartphones fanned out being splashed with water to show their water resistance.

Image source: Apple.

iPhone sales improve

Investors are still obsessed with the performance of the iPhone, and with good reason. Even after its recent fall from grace, the device still accounts for more than 52% of Apple's sales. Revenue from the iconic smartphone came in at $33.36 billion, down about 9% year over year, but easily topping expectations of $32.8 billion.  

On the conference call, Apple CEO Tim Cook said he was pleased with the iPhone's performance.

"The significant upswing in demand in the final part of the quarter is mirrored in the overwhelmingly positive reviews, customer feedback, and in-store response we've seen for this new generation of devices, not to mention a wave of the best photos you've seen from a smartphone," he said. 

While Apple didn't provide a specific forecast for iPhone sales for the upcoming quarter, its guidance suggests further improvement and potentially a return to growth for its flagship device. Apple is forecasting revenue growth in a range of $85.5 billion and $89.5 billion, which would represent growth of between 1% and 6% year over year, while the midpoint of its guidance easily tops analysts' current estimates of $86.7 billion. The wide range of its forecast provides room for the iPhone to shine next quarter.

The growing heft of services

Cook's announcement in early 2017 that Apple planned to double services revenue within four years predates the iPhone's recent struggles, making it seem somewhat prescient in retrospect. At the time of the statement, Apple's trailing-12-month (TTM) services revenue was $25.46 billion, giving the company an ambitious goal of nearly $51 billion. Fast-forward to today, and TTM services revenue hit $46.29 billion, which suggests that Apple will probably surpass the watermark ahead of schedule.

On the conference call, Cook said Apple has 450 million paid subscribers in its services segment, up 36% year over year, and that Apple's "well on our way" to achieving its goal of 500 million subscribers by 2020.

Tim Cook standing on stage in front of a closeup of the three camera system on the iPhone 11 Pro.

Apple CEO Tim Cook on stage at the iPhone 11 launch in September.

China sales stabilized

There's been a great deal of speculation about sales of Apple devices in China, as the trade war, economic weakness, and intense competition gave investors a trio of things to worry about and numerous potential stumbling blocks for the Cupertino company.

The results show that sales of Apple products in Greater China may soon return to growth. Revenue declined to $11.13 billion, down about 2% from the prior-year quarter. While this marked the fourth consecutive quarter of year-over-year declines, it was notably the lowest percentage decline this year. That suggests that Apple sales in China may be returning to growth as early as next quarter.

Parting thoughts

For all the wailing and gnashing of teeth about Apple's fate over the past year, the tech giant has stuck to its plan: improving the iPhone, growing its services, and returning to growth in China. If the results of this quarter are any indication, Apple is on the verge of succeeding at all three.

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