Apple beats expectations, sells 26M iPads & 51M iPhones

Apple sees higher profits and revenue than Wall Street had expected

Looks like everyone had a very Apple Christmas last month. (Have yourself an Apple little Christmas, let your iPads glare…from now on our print books will be miles away…)

Apple beat expectations this year as December quarter net profit came in at $13.1 billion or $14.50 per share on revenue of $57.6 billion. Analysts were expecting an EPS of $14.09 on $57.5 billion in revenue.

The company sold 51 million iPhones, marking an all-time quarterly record. By comparison, in Q4 2012, the company sold 47.8 million iPhones. IPads also got a big boost last quarter with Apple selling 26 million units—also an all-time quarterly record. That’s up from 22.9 million iPads sold in Q1 2013. And Mac sales saw a bump of 19% as Apple sold 4.8 million units, up from 4.1 million last year.  

Some other interesting tidbits for the quarter: over seven million iPads have been purchased by U.S. educational institutions, and some 7,000 iPads are being distributed to students in the Midway Independent School District. More than 750,000 iPads have been purchased for K-12 students in Texas alone.

IPads now account for 78% of tablet traffic while iPhones account for 54% of smartphone Web traffic. Additionally, iPhones now account for 59% of the U.S. commercial smartphone market.

Also revealed in the call: almost very NFL team now uses an iPad for their playbook instead of the traditional three-ring binder (something to look for at the Super Bowl this weekend).

Additionally, 80% of iOS devices are now running iOS 7, making it the most popular operating system in the world. Meanwhile, iPod sales declined a whopping 52% in the fourth quarter, but what’s new?

As for the iPhone 5C, Tim Cook cautiously admitted that demand for the new “low-cost” iPhone was “different than we thought.” Indeeeeed.

But, Apple’s big China Mobile deal will make up for that in spades. While the deal was signed after the holidays and the number of iPhone purchases and activations is not included in the fourth quarter earnings, the company did say that last week was the best week for iPhone activations Apple has ever had in China to date.

And iTunes saw record billings last quarter, coming in at $4.7 billion. Over 130,000 apps have been developed in China thus far.

The company is setting its second quarter guidance at $42-$44 billion in revenue with gross margins of 37-38%. 

Shares dropped 7.5% in after-hours trading to $508.