Apple iPhone sales power record $18 billion profit

Devices giant Apple reported a net profit of $18.02 billion, or $3.06 per diluted share, compared with $13.07 billion, or $2.07 per share, a year earlier.

The company’s quarterly results smashed Wall Street expectations with record sales of big-screen iPhones in the holiday shopping season and a 70 per cent 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 December 27, while many analysts had expected fewer than 70 million. Revenue rose to $74.6 billion from $57.6 billion a year earlier.

Profit of $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 $178 billion, enough to buy IBM or the equivalent to $556 for every American. Apple Chief Executive Officer Tim Cook said the company would release its next product, the Apple Watch, in April.

Shares rose about 5 per cent to $114.90 in after-hours trade.

Daniel Morgan, senior portfolio manager at Apple-shareholder Synovus Trust Company in Atlanta said that the report was a good sign in a quarter where big tech companies such as IBM and Microsoft have disappointed.

Apple Chief Financial Officer Luca Maestri said that the company did not sell more iPhones in China than the US, despite some earlier predictions by research analysts.

But the big-screen iPhone 6 and 6 plus drove revenues in China were up 70 per cent 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, 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.