Source: Apple.

Summer is usually a slow time for Apple (AAPL -1.00%), much as it is for other consumer-electronics companies. For the iPhone maker specifically, summer is right before its widely publicized iPhone launches, which should intuitively create purchase delays as consumers wait for the latest and greatest. Not this time.

Apple just crushed expectations.

Starting with the headliners
Most of the pertinent metrics tapped new records for the quarter ended in September. Revenue came in at $42.1 billion, which translated into $8.5 billion in net income. That's $1.42 per diluted share. Gross margin stayed strong at 38%, a modest sequential decline. Apple also declared a $0.47-per-share quarterly dividend.

The Street was modeling for $39.9 billion in revenue, $1.29 in EPS, and a gross margin of 37.9%. Apple's own guidance topped out at $40 billion and 38% gross margin.

iPhone is officially a $100 billion business
Despite all of the speculation surrounding the iPhone 6, iPhone unit sales came in well above expectations at 39.3 million, a 16% jump from a year ago. Analysts were expecting just 37.5 million units. Average selling prices put up an encouraging $42 jump to $603. That helped trailing-12-month iPhone revenue cross the $100 billion threshold for the first time ever.

Source: SEC filings. Fiscal quarters shown. TTM = trailing 12 months.

Even better yet, Apple normally puts up another ASP increase during the calendar fourth quarter following the launch of new models, so the company could have an ASP tailwind this holiday quarter.

Apple is unsure of when it will reach supply and demand balance, since it currently has a significant backlog of orders. The company is selling every unit it can make, and CEO Tim Cook said supply and demand are currently so far apart that they're "not even on the same planet."

iPad is still lagging
Technically speaking, the iPad remains a relative soft spot in Apple's results, with unit sales falling 13% to 12.3 million. There's a broader deceleration occurring in the tablet market, and Apple is not immune. Still, Cook continues to consider the current situation little more than a "speed bump" on the long-term road to riches.

He also added some useful context. First, since Apple has been in the tablet business for only four years, it's difficult to determine what the upgrade cycle will be. Everyone expects it to be longer than smartphone upgrade cycles, but it remains unclear by how much. On top of that, what's not shown in these high-level figures is which countries Apple is selling in, or the demand characteristics in those countries.

Adoption in developed markets was very quick to take off, and those users are still trying to determine their upgrade cycles. Sales are now shifting to emerging markets, where 50% to 70% of buyers are first-time tablet buyers. That has important long-term implications, since those users are now on the Apple upgrade track.

Cook is less interested in the quarterly trends and remains extremely bullish on the bigger picture.

Macs set a new record
Apple sold 5.5 million Macs during the quarter ended in September, a new record and again outpacing the broader PC market. The back-to-school season was particularly kind to the company, according to Cook.

Management attributed this strength to its laptop lineup, which is even more impressive considering the mid-2014 upgrades were modest, as Apple is still waiting for Intel to ship its Broadwell chips in volume.

Cranking up share repurchases
Last quarter, Apple kind of slowed its rate of share repurchases, which made sense, since shares have recovered and it gets marginally less bang for its repurchase buck. This quarter, Apple cranked up the repurchase again, embarking upon its fourth accelerated share repurchase program, or ASR.

Source: SEC filings. Fiscal quarters shown.

Share repurchases this quarter totaled $17 billion, consisting of a $9 billion ASR program and $8 billion in open market repurchases. Even as Apple shares are now within spitting distance of all-time highs, it clearly still thinks the current valuation is compelling. Cook more or less agrees with Carl Icahn.

Once again, the buybacks helped juice EPS growth. Diluted EPS was up 20%, outpacing the 13% jump in net income. Apple has now repurchased nearly $68 billion to date, leaving over $22 billion of its total $90 billion repurchase authorization. That should hold it over until the next update to its capital return program, which is typically in March or April.

Some reporting changes
Starting in fiscal 2015, which just kicked off, Apple is also making changes to its reporting methods. The last reporting change occurred about two years ago, when the company unbundled accessories and peripherals from their related segments and established the iTunes/Software/Services segment.

Going forward, iTunes/Software is being renamed the Services segment, but this will also include other services such as Apple Pay. Other Products will include the current accessories business, along with the iPod, Apple TV, and forthcoming Apple Watch.

Current segments

Future segments










Other products



Source: Conference call.

One analyst asked whether grouping Apple Watch into the Other Products segment says anything about Apple's expectations for its upcoming wearable. Cook responded decisively, "It says nothing about our expectations." Rather, the decision was based on current revenue bases, and Apple may decide to break out Apple Watch performance at a later time.

More importantly, Apple knows that its smartwatch competitors are watching its every move and are very interested to get figures and data points surrounding this nascent business -- figures and data points that Apple doesn't want to share with its rivals. Not sharing with rivals entails not sharing with public investors.

That may be somewhat frustrating, especially at first, but if Apple Watch becomes material to the business, then Apple will probably begin disclosing pertinent figures. Until then, Apple will probably tout various milestones as it hits them from time to time.

Additionally, Apple's retail results have long been a distinct segment, which has always made its geographical disclosures incomplete. For instance, all retail stores have been included in this reportable segment, regardless of where they are located. Apple is dissolving the Retail reporting segment and will begin including those results in the stores' respective geographies. That will make the geographical segments much more relevant and usable (finally), particularly the all-important Greater China segment.

It's the time of the season
As Apple heads into the holiday season with a fresh product lineup, it's expecting another all-time record quarter. Revenue is expected in the range of $63.5 billion to $66.5 billion, which represents 13% growth at the midpoint. That would be the highest growth in eight quarters, before even considering the possibility of a blowout.

So much for slow summers -- or falls or winters for that matter.