The iPhone number was the biggest surprise in the results as sales usually soar once prices tend to ease after the Christmas season.
Many analysts anticipate that the company will deliver a completely redesigned iPhone later this year.
Apple's earnings per share were higher than expected at $2.10, compared to $2.02 while its market cap slipped to $765 billion during after hours trading due to the poor results.
"We are proud to report a strong March quarter, with revenue growth accelerating from the December quarter and continued robust demand for iPhone 7 Plus", CEO Cook said on Tuesday. On the bright side, Mac sales rose from 4 million to 4.2 million year-on-year.
The company boosted its capital return program by $50 billion USA, increasing its share repurchase authorization by $35 billion U.S. and raising its quarterly dividend by 10.5 per cent. Cook also said Apple plans to fund programs that could include teaching people how to write computer code to create apps, and will release more details about the effort this summer.
In the first three months of 2017, net income was $11.03bn, or $2.10 per share, up from $10.52bn, or $1.90 per share, during the same period in 2016.
Mr Cook also pointed to growth in sales of Apple Watch, as well as its AirPods and Beats earphones.
"In our view, consumers are becoming aware of the product cycle and we believe this should cause increased seasonality in the product as consumers await updated and fully remade iPhones", said Amit Daryanani, an analyst at RBC Capital Markets.
In the company's earning call, Cook blamed unfavorable exchange rates and falling sales in the Hong Kong market, which attracted fewer Chinese visitors to purchase Apple products during the period.
Apple's gross margin hit 38.9 per cent, slightly ahead of analysts' average expectation of 38.7 per cent, despite higher prices for memory chips. The money will be put into a USA advanced manufacturing fund.