Apple Inc quarterly results smashed Wall Street expectations with record sales of big-screen iPhones in the holiday shopping season and a 70% rise in China sales, powering the company to the largest profit in corporate history.
The company sold 74.5m iPhones in its fiscal first quarter ended December 27, 2014 while many analysts had expected fewer than 70m. Revenue rose to $74.6bn from $57.6bn a year earlier.
Profit of $18bn was the biggest ever reported by a public company, worldwide, according to S&P analyst Howard Silverblatt. Apple’s cash pile is now $178bn, enough to buy IBM or the equivalent to $556 for every American.
Apple CEO Tim Cook said the Cupertino, California-based company would release its next product, the Apple Watch, in April.
Daniel Morgan, senior portfolio manager at Apple-shareholder Synovus Trust Company 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 CFO Luca Maestri told Reuters in an interview that the company did not sell more iPhones in China than the United States, despite some earlier predictions by research analysts.
But the big-screen iPhone 6 and 6 plus drove revenues in China were up 70% 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 (0941.HK), 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 greater China by mid-2016, Maestri told analysts on a conference call.
Carolina Milanesi, an analyst with Kantar Worldpanel ComTech, also lauded a 14% 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 Chinese New Year holiday and reflect Apple’s attempts to sell through new channels.
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.
