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Phab-ulous Apple profit

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The new big-screen iPhones helped propel Apple’s profit and revenue in the past quarter, as the California tech giant delivered stronger-than-expected results.

Profit rose 13 per cent to $US8.5 billion ($A9.2 billion), as revenues jumped to $US42.1 billion in the fiscal fourth quarter ending September 27, the California-based company reported on Monday.

Apple said it sold more than 39 million iPhones in the quarter, boosted by the launch last month of the large-screen iPhone 6 and 6 Plus, which hit some markets on September 19. That compared with 33.8 million in the same period a year ago.

The iPhone 6 Plus is Apple’s first product in the growing market for “phablet” phones, which are increasingly replacing tablets.

The iPhone accounted for more than $US23 billion in revenue, more than half of Apple’s overall earnings for the quarter.

Sales of iPads – which may have been lower ahead of the October launch of new models – fell from a year earlier to 12.3 million, producing some $5.3 billion in revenues.

Apple also sold 5.5 million Mac computers and 2.6 million iPods in the quarter.

The results were the best ever for the September quarter, and the fiscal year that just ended “was one for the record books”, chief executive Tim Cook said in a statement.

Apple, the world’s biggest firm by market value, closed its fiscal year with a profit of $US39.5 billion on revenues of nearly $US183 billion.

Trip Chowdhry at Global Equities Research said Apple’s quarterly report “handsomely beats (expectations) on both top line and bottom line.

“These results validate our investment thesis Apple is a multi-year, multi-product, multi-service and multi-geography growth company.”

Apple shares rose 1.1 per cent to $US100.91 in after-hours trade following the results.

“Apple continues to hit it out of the park,” independent analyst Jeff Kagan said.

“Apple was showing strong growth, year after year, until a couple years ago. That’s when they fell and that lasted for a while. However Apple now appears to be back.”

Amit Daryanani at RBC Capital Markets said Apple’s guidance for the key upcoming holiday season was also ahead of most predictions.

Apple forecast revenue between $US63.5 billion and $US66.5 billion and gross profit margins between 37.5 per cent and 38.5 per cent.

“The big upside driver in the quarter was iPhone units,” Daryanani said, adding that Apple’s forecast “leaves plenty for upside surprises”.

Apple last month increased the screen size for its new iPhones, yielding to consumer preference and following a trend begun by rivals, including Samsung.

The iPhone 6 Plus is Apple’s first product in the growing market for “phablet” phones, which are increasingly replacing tablets.

 

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