Apple Inc. shares reversed an initial loss in extended trading to gain as much as 4% after the management project revenue growth to continue in the ongoing quarter, despite the iPhone struggles in its core Chinese market and a stronger currency.

For the March quarter, which will be Apple’s second for the financial year 2025, the iPhone manufacturer expects low-to-mid-single-digit growth on an annual basis. It also guided for its services division to grow in low double-digits from last year. This will be offset by a stronger US Dollar, that will impose a 2.5% drag on overall sales.

Accounting for all this, Apple expects overall growth rate to be around 6%, similar to the December quarter, the management said in its earnings call.

Although Apple’s overall sales were above expectations and increased on a year-on-year basis, its closely watched iPhone sales not only declined from last year, but also were below expectations by a big margin.Here’s how the numbers looked during the quarter:

• Revenue: $124.3 billion Vs $124.12 billion estimate
• Earnings Per Share: $2.4 Vs $2.35 estimated
• iPhone Sales: $69.14 billion Vs 71.03 billion estimate
• Services Revenue: $26.34 billion Vs $26.09 billion estimate
• Other Products Revenue: $11.75 billion Vs $12.01 billion estimated

The iPhone sales missing estimates was the biggest in two years, since the first quarter earnings report of fiscal 2023. Apple had missed projections back then as it said it was unable to make enough iPhone 14 due to production issues in China.

Greater China was a big drag on Apple’s results, which also includes Hong Kong and Taiwan along with the mainland. Overall China sales fell 11.1%, the largest drop since the same quarter last year, when they fell 12.9%.

Apple CEO Tim Cook said that iPhone sales were stronger in countries where Apple intelligence is available. Currently, the software is not accessible in China.

Revenue for Apple’s services business grew 14% from last year and it had over 1 billion subscriptions, including those for Apple TV+ and iCloud. Apple will also pay $0.25 per share as dividends and spend $30 billion on dividends and buybacks during the quarter.

Shares of Apple reversed initial losses of as much as 2% in extended trade to gain 3.5% as of 6 PM New York time to $245.82. The stock ended 0.7% lower in regular trading.