Apple Inc. (NASDAQ:AAPL) late Tuesday posted better than expected fiscal first quarter earnings results, as iPhone sales also topped expectations and the company ended its quarterly sales decline streak.

Its outlook for the second quarter was weaker than expected, but strong iPhone sales and a return to sales growth sent its shares higher in late trading.

The Cupertino-based tech giant reported Q1 EPS of $3.36, which was $0.14 better than the Wall Street consensus estimate of $3.22. Revenues rose 3.3% from last year to $78.35 billion, also topping analysts’ view for $77.26 billion. That revenue gain marked the end of a three-quarter string of year-over-year revenue declines.

Apple noted that its gross margin in the latest quarter was 38.5%, down from 40.5% in the year-ago period, but still in-line with expectations.

As for the all-important iPhone sales, Apple said it sold 78.3 million iPhone units in the holiday quarter, beating out estimates for 77.3 million. That’s a 4.7% rise from the 74.8 million units sold in the year-ago period.

On a sour note, AAPL’s iPad sales continued to struggle. The company sold 13.1 million iPads in Q4, badly missing estimates for 14.7 million, and down 18.6% from last year’s 16.1 million level. Meanwhile, Mac sales edged higher to 5.4 million, beating analysts’ view for 5.2 million.

Looking ahead, Apple forecast Q2 revenues ranging from $51.5 to $53.5 billion, well short of the $54.05 billion that Wall Street is looking for. Gross margins are expected to be 38% to 39%, in-line with estimates.

The company commented via press release:

“We’re thrilled to report that our holiday quarter results generated Apple’s highest quarterly revenue ever, and broke multiple records along the way. We sold more iPhones than ever before and set all-time revenue records for iPhone, Services, Mac and Apple Watch,” said Tim Cook, Apple’s CEO. “Revenue from Services grew strongly over last year, led by record customer activity on the App Store, and we are very excited about the products in our pipeline.”

Apple Inc. shares rose $3.14 (+2.59%) to $124.49 in after-hours trading Tuesday. Year-to-date, AAPL has gained 4.77%, versus a 1.79% rise in the benchmark S&P 500 index during the same period.

AAPL currently has a StockNews.com POWR Rating of A (Strong Buy), and is ranked #1 of 24 stocks in the Technology – Hardware category.

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