Apple raked in $75.9 billion in revenue in the final quarter of 2015, surpassing the record it set in the same quarter a year ago — but the company saw slowing iPhone demand and said revenue for the current quarter would be lower than analysts’ estimates.
The company sold 74.8 million iPhones in its fiscal first quarter ended Dec. 26, below what analysts expected. The iPhone is Apple’s cash cow, accounting for at least 60 percent of its revenue.
“Our team delivered Apple’s biggest quarter ever, thanks to the world’s most innovative products and all-time record sales of iPhone, Apple Watch and Apple TV,” Apple CEO Tim Cook said in the earnings release.
Analysts polled by S&P Capital ahead of the earnings release expected to see revenue of $76.596, or $3.34 a share, up slightly from $74.599 billion in the fourth quarter a year ago.
Apple’s stock closed trading on Tuesday at $99.99.
The company’s shares have fallen 11 percent since its last earnings report was released in October amid concerns that iPhone sales might be leveling off. Those fears have been fanned by some of Apple’s major suppliers in Asia forecasting decreased revenues for the coming quarter.
"Estimates for iPhone sales have been coming down consistently, and by the way, that's for the whole smartphone market," Dan Niles, founding partner at Alpha One Capital Partners, said on CNBC. "The market is slowing down."
For the current quarter ending in March, Apple forecast revenue between $50 billion and $53 billion — below analysts’ estimates of $55.6 billion and what would be the iPhone maker’s first year-over-year sales decline in more than a decade.
Asked on a conference call with analysts about the expected second-quarter decline in sales growth, Apple CEO Tim Cook said he wasn’t worried that the iPhone market was reaching saturation. "The metrics that I see would strongly suggest otherwise," he said, later adding, "our strategy is always to make the best products."
Gartner analyst Brian Blau said weakening demand for the iPhone will set expectations that Apple may not be as profitable or as popular in the future.
"That said, it's important to note that Apple has a wide variety of products in market and we can assume there are many more planned, in addition to the large resource base they can tap for research and development and expansion efforts," Blau was quoted as saying by Reuters.
Apple released it latest iPhones, the 6S and 6S Plus, in September. The company is expected to release the next iPhone models later this year.
--- NBC News' James Eng contributed to this report