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Apple Inc. (NASDAQ: AAPL) plummeted after reporting quarterly earnings that missed the expectations of Wall Street analysts.

The shares of Apple closed $130.75 per share, down by 1%. The stock price of the iPhone maker declined further by almost 7% to $121.90 per share during the extended hours trading, around 4:48 P.M. on Tuesday.

Apple third-quarter financial results

Apple reported earnings of $10.7 billion or $1.85 per diluted share for the third quarter. Its revenues were $49.6 billion. During the same period last year, the tech giant delivered earnings of $7.7 billion or $1.28 per share on $37.4 billion in revenues.

Wall Street analysts are expecting Apple to achieve earnings of $1.90 per share on $49.3 billion in revenues for the third quarter,

Apple said its gross margin for the period was 39.7%, up from 39.4% in the same quarter a year earlier. Its international sales accounted for 64% of its quarterly revenue.

Apple CEO Tim Cook said, “We had an amazing quarter, with iPhone revenue up 59 percent over last year, strong sales of Mac, all-time record revenue from services, driven by the App Store, and a great start for Apple Watch. The excitement for Apple Music has been incredible, and we’re looking forward to releasing iOS 9, OS X El Capitan and watchOS 2 to customers in the fall.”

Apple sold 47, 534,000 units of iPhone, 10,931,000 units of iPad, and 4,796,000 units of Mac devices during the third quarter. Analysts estimated that the company sold around 48 million to 50 million iPhones during the period.

On the other hand, Apple CFO Luca Maestri said Apple’s growth rate accelerated in the third quarter with a 33% increase in revenue and a 45% increase in earnings per share.

Maestri added that Apple generated a very strong operating cash flow of $15 billion, and the company returned $13 billion to shareholders through its capital return program.

The board of directors of Apple declared a cash dividend of $0.52 per share on its common stock. The dividend will be payable on August 13 to shareholders of record as of the close of business on August 10.

Apple business outlook

Apple estimated that it would be able to generate revenues in the range of $49 billion to $51 billion for the fourth quarter. The tech giant also expected its gross margin to be around 38.5% to 39.5%, operating expenses in the range of $5.85 billion to $5.95 billion, and tax rate at about 26.3%.

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