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CompaniesApple profits top forecasts; revenue outlook lags

Muted sales of the iPhone and iPad in Apple's third quarter did not prevent it from beating analysts' earnings forecasts, as investors eagerly anticipate new product launches later this year.

Apple's outlook for the three months to September, a quarter which will likely see the release of the iPhone 6 in larger screen sizes, predicted revenues of $37bn to $40bn, a little below Wall Street's forecast of around $40.7bn, reports Tim Bradshaw in San Francisco.

Expectations for a strong performance by Apple have been rising since it delivered better-than-forecast iPhone sales three months ago.

While Wall Street was hoping for iPhone sales of around 37m in the June quarter, Apple reported 35.2m, up 13 per cent on the same quarter a year ago.

iPad sales were also slightly below analysts' more modest expectations at 13.3m, down from 14.6m last year.

However, earnings of $1.28 per share compared favourably with analysts' consensus estimates of $1.23, with gross margins reaching 39.4 per cent, a sharp increase over the prior year.

Apple shares have risen more than 20 per cent in the last three months, ahead of the release later this year of what Apple's iTunes chief Eddy Cue has called the "best product pipeline" in 25 years.

The June quarter is typically a slower one for Apple as customers wait for the next version of the iPhone, which usually goes on sale at the end of September.

"Our record June quarter revenue was fueled by strong sales of iPhone and Mac and the continued growth of revenue from the Apple ecosystem, driving our highest EPS growth rate in seven quarters," said Tim Cook, Apple's chief executive.

"We are incredibly excited about the upcoming releases of iOS 8 and OS X Yosemite, as well as other new products and services that we can't wait to introduce."

Apple has now distributed more than $74bn of the $130bn it has earmarked to return to shareholders by the end of 2015, it added.

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