Apple Inc quarterly results smashed Wall Street expectations with record sales of big-screen iPhones in the holiday shopping season and a 70 percent rise in China sales, powering the company to the largest profit in corporate history.
The company sold 74.5 million iPhones in its fiscal first quarter ended Dec. 27 last year, while many analysts had expected fewer than 70 million. Revenue rose to US$74.6 billion from US$57.6 billion a year earlier.
Profit of US$18 billion was the biggest ever reported by a public company worldwide, according to S&P analyst Howard Silverblatt.
Apple’s cash pile is now US$178 billion, enough to buy IBM Corp or the equivalent to US$556 for every American.
Apple CEO Tim Cook said the Cupertino, California-based company would release its next product, the Apple Watch, in April.
Shares rose by about 5 percent to US$114.90 in after-hours trade.
Daniel Morgan, senior portfolio manager at Apple-shareholder Synovus Trust Co in Atlanta, Georgia, said that the report was a good sign in a quarter where big tech companies such as IBM and Microsoft Corp have disappointed.
Apple chief financial officer Luca Maestri told reporters in an interview that the company did not sell more iPhones in China than the US, despite some earlier predictions by research analysts.
However, the big-screen iPhone 6 and 6 Plus drove revenue in China, which was up 70 percent in the quarter from a year earlier. The company’s success in the competitive Chinese market can be attributed to its partnership with China Mobile Ltd (中國移動), the largest global mobile carrier, and the appeal of the larger screen size of the iPhone 6 and 6 Plus.
Maestri said he does not expect Apple to struggle because of China’s slipping economic growth.
“We haven’t seen a slowdown,” he added.
Maestri also said the company doubled iPhone sales in Singapore and Brazil.
Apple will reach 40 company stores in China by the middle of next year, Maestri told analysts on a conference call.
Kantar Worldpanel ComTech analyst Carolina Milanesi also lauded a 14 percent rise in unit sales of Apple Macintosh computers and sales of older iPhone models.
Apple was well positioned for the current quarter in China, she added, which will include the Lunar New Year holiday and reflect Apple’s attempts to sell through new channels.
Apple reported net profit of US$18.02 billion, or US$3.06 per diluted share, compared with US$13.07 billion, or US$2.07 per share, a year earlier. That topped expectations of US$2.60 per share, according to Thomson Reuters I/B/E/S. Analysts had expected revenue of US$67.69 billion.
Maestri said that Apple faced “a clear headwind” from the strong US dollar, but that it had included the challenge in its forecasts. Apple predicted revenue of US$52 billion to US$55 billion in its fiscal second quarter, compared with Wall Street’s average target of US$53.79 billion.
Cook said that the company’s new mobile payment service, Apple Pay, which lets customer buy products from select merchants with their phones, was in its “first inning” and the company would consider adding new features as it looked at expanding outside the US.
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