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Apple (AAPL) - Get Apple Inc. Report shares were rising more than 5% after hours on Tuesday as the company beat reduced earnings and revenue estimates for its December quarter.  

The tech giant reported EPS of $4.18 vs. $4.17 expected, while revenue came in at $84.3 billion, above an $83.97 billion consensus. Apple had forecast on Jan. 2 that it expected revenue of about $84 billion, roughly $7 billion less than expected, because of disappointing sales in China.

For the March quarter, Apple said it expects revenue of $55 billion to $59 billion, slightly less than a $58.98 billion consensus.

"While it was disappointing to miss our revenue guidance, we manage Apple for the long term, and this quarter's results demonstrate that the underlying strength of our business runs deep and wide," said Tim Cook, Apple's CEO, in a press release. "Our active installed base of devices reached an all-time high of 1.4 billion in the first quarter, growing in each of our geographic segments.

iPhone revenue declined 15% from the previous year, while revenue from all other products and services grew 19%. Services revenue, an important focus of Apple's as iPhone growth slows, grew 19% to an all-time high of $10.9 billion.

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"We generated very strong operating cash flow of $26.7 billion during the December quarter and set an all-time EPS record of $4.18," said Luca Maestri, Apple's CFO. "We returned over $13 billion to our investors during the quarter through dividends and share repurchases. Our net cash balance was $130 billion at the end of the quarter, and we continue to target a net cash neutral position over time."

For the first time, Apple broke down gross margins by business unit, reporting that margins for its Services businesses were 62.8% while product margins came in at 34.3%. 

Shares were rising 5.3% to $163.27 after-hours on Tuesday.

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