Apple announced another strong quarter driven once again by strong iPhone sales. But Apple technically missed iPhone sales expectations despite soaring revenue, and investors aren’t happy about it.

The company announced earnings of $1.85 per share on revenues of $49.6 billion for its fiscal third quarter ending June 15. Analysts were expecting earnings per share of $1.81 on revenues of $49.3 billion. In the same quarter a year ago, Apple reported earnings of $1.23 per share on revenues of $37.4 billion. Profits were $10.7 billion.

Apple sold 47.5 million iPhones in the quarter, extending the strong selling streak of the iPhone 6 and iPhone 6 plus.

“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,” said Apple CEO Tim Cook. “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.”

Not all of the results were cheery, however.

Analysts were hoping to see iPhone sales on the order of 49 million or 50 million; they got only 47.5 million. That’s likely the biggest reason Apple stock is down 6.7 percent in after hours trading at the time of this writing.

Sales of iPhones in China were big drivers of Apple’s Q2 earnings, but overall revenues from China are down 21 percent from last quarter, suggesting that the Chinese market for iPhones may be decelerating.

Tablet sales continue to flatten, continuing the trend from the December-ending quarter. Apple reported sales of 10.9 million units, a 18 percent drop from the year-ago period.

Gross margin was 39.7 percent compared to 39.4 percent in the year-ago quarter. A recent report said that Apple is soaking up 92 percent of all the profit made worldwide from manufacturing smartphones.

Last quarter (ending March 15) Apple announced earnings of $2.33 per share on revenues of $58.01 billion for the quarter. Gross margin was 40.8 percent.

Analysts had said that the iPhone would continue to be the driving factor in Apple’s financial performance, and that proved to be true once again. Apple sold 61.5 million phones last quarter (when phone sales are seasonably down), and 74.5 million phones in the first quarter.

Apple says it expects revenue between $49 billion and $51 billion next quarter, with gross margin between 38.5 percent and 39.5 percent.

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