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Tim Cook on Apple's big earnings beat

Apple CEO Tim Cook spoke to CNBC's Josh Lipton following the company's earnings report on Tuesday. Here's a full transcript.

Tim Cook: We had a great quarter, I couldn't be happier – revenues came it at 45.4 billion which was at the top end of our guidance. Gross margins came in at 38.5% which was at the top end of our guidance. Revenues have now accelerated for 3 quarters in a row, from the growth rate point of view. And if you look at EPS we were up 17% year on year and so it was a fantastic quarter in any way you look at it.

If you look at the products, we sold 41 million iPhones but frankly it's better than that because we also reduced channel inventories by 3.3 million, largely because the sell-through was more than we expected. If you look across the world, we had several markets in Asia, in Latin America, and the Middle East which grew more than 25% year on year. If you look at 7 in the 7 Plus family, we grew strong double digit year on year as compared to the 6S/6S Plus a year ago. So iPhone was terrific.

If you look at services, we came in at 7.3 billion which was up 22% year on year, really great quarter. And we have now achieved our goal of being of the size of a fortune 100 company earlier than we thought. We've now achieved it on a look-back basis. We're very proud of that.

The number of subscriptions across the App Store were up 20 million during the last 90 days to over 185 million. As a reminder, that's a combination of Apple branded services like Apple Music and third party branded things, although it's principally… Apple is the biggest piece of that obviously in our services. These are paid subscriptions to be clear."

If you look at iPad, iPad was up 15% year on year. The approach we've had from a product point of view, of bifurcating iPad and iPad Pro, is really resonating with our users. The iPad launch that we did at the end of March and the iPad Pro announcement from June both were received extremely well and gave us the best compare on iPad that we've in many, many quarters.

We picked up share globally and in every major geography in the world on iPad. Also, a highlight of iPad was that U.S. education was up 32% year on year to over one million units, and so education doing well, and enterprise continues to do well in our partner initiatives with Cisco and IBM and Deloitte and SAP are all going extremely well.

The Mac also picked up global unit market share during the quarter. Our revenues on Mac were up 7% on the strength of the announcements we made at the development conference versus the global PC unit market shrank by 4%. Apple watch was up over 50% year on year. The series 2 is really resonating and I'm getting so many mails from people who are being helped along with lifestyle and fitness changes with the watch. It's really gratifying to see"

And so, if you sort of summarize the top line results were at the high end of our expectations EPS very, very incredible growth at 17%, iPhone, Mac, iPad, and Watch all doing really well. Our guidance for the current quarter from a...