Executive Summary

• Apple reported 4Q16 EPS of $1.67, down 14.6% year over year but beating the consensus estimate by $0.03. Revenues were $46.9 billion, down 9.0% year over year and slightly below the $47.0 billion consensus estimate.
• Apple sold 45.5 million iPhones in the quarter, slightly more than analysts expected. Unit sales for all product categories—iPhone, iPad and Mac—were down year over year. Services revenue was up 24%, setting a new record.
• Apple guided for 1Q17 revenues of $76–$78 billion, above the consensus estimate of $75 billion. The margin and expense ranges provided result in an EPS range of $3.06–$3.23, with the midpoint below the consensus estimate of $3.21.