Apple CEO Tim Cook during a new-product announcement last year in Cupertino, CA. Photo: Marcio Jose Sanchez / AP

Apple on Thursday reported sales and earnings well ahead of projections and, importantly, also said holiday sales should be a record and ahead of many analysts' expectations. Its sales of 46.6 million iPhones last quarter came in about 500,000 units ahead of expectations.

Shares soared in after-hours trading to a new record, changing hands recently at $173.72, up $5.61, or more than 3%.

Why it matters: Going into the earnings report, there were concerns about both iPhone 8 demand and iPhone X supply. Thursday's report should go a long way toward answering those questions.

Sales were up in every region except Japan, where business was down from the prior year, though up sequentially. Notably, the company finally saw a much-needed turnaround in Greater China, where sales of $9.8 billion were up 22% from the prior quarter and 12% from a year ago. The company's business has been weak in China for some time, though the company had predicted improvement this quarter.

By the numbers:

Last quarter

  • Revenue: $52.6 billion (vs $51.2 billion estimated)
  • Per-share earnings $2.02 (vs. $1.87 estimated)
  • iPhones sold. 46.6 million (vs 46.1 million estimated)
  • iPads sold: 10.3 million (vs about 10 million expected)
  • Macs sold: 5.4 million (vs about 5 million expected)
  • Services revenue: $8.5 billion (up from $7.3 billion last quarter and $6.3 billion a year ago)

Current quarter forecast

  • Revenue: $84 billion to $87 billion (vs expectations of around $83 billion)

Highlights from the earnings conference call (in progress)

  • Apple Watch unit growth was more than 50% for the third consecutive quarter (though Apple didn't give specific numbers)
  • In Greater China, Apple saw unit growth and market share gains for iPhone, iPad and Mac, with Mac sales and services revenue in China at record levels.
  • Business in emerging markets outside China was up 40%, with sales in India double those of a year earlier.
  • Cook said Apple's wearables business (Apple Watch + AirPods, etc) would be a Fortune 400 company by itself. (No. 400 on the Fortune 500 list, Calpine, had revenue of $6.7 billion last year.)
  • Manufacturing of the iPhone X is going well, Cook said; However, he said he can't say when supply will match demand.
  • Cook wouldn't say how the iPhone 8 Plus sales compared to the standard model, but did say that it is off to the fastest start of any Plus model, which he said was a positive surprise.
  • Apple says its music business, which had been in decline, is once again growing thanks to Apple Music.
  • iCloud is growing at double digits and the services business overall is the size of a Fortune 100 business.

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