Subscribe

China iPhone sales boost Apple

By Reuters
US, 28 Apr 2015

Apple beat Wall Street's revenue and profit forecasts yesterday, as it sold more iPhones in China than the US for the first time, but the company gave no sales figures for its new Apple Watch.

Apple's iPhone sales in China soared, increasing its revenue in the country by 71% to $16.8 billion, although this was helped by gift-buying for Chinese New Year.

CEO Tim Cook said China's expanding middle class is fuelling iPhone sales there, which form the bulk of the company's sales. The iPhone 6 was launched last year in China with a number of carriers.

Wall Street hailed the results but share reaction was muted. Its shares rose 1.6% in after-hours trading to $134.52.

Apple sold 61.2 million iPhones in the quarter, up 40% from the year-ago quarter, but down from the record-breaking holiday quarter. It sold 12.6 million iPads, down 23% from a year ago.

Apple's large-screen iPhone 6 and 6 Plus have been popular with customers worldwide, helping the company overtake its rival, Samsung, in global smartphone sales last quarter.

"A 60 million-plus iPhone number is a home run and will be cheered by the Street as this remains the bread and butter of Apple," said FBR Capital Markets analyst Daniel Ives.

Apple gave no sales figures for its recently-released Apple Watch, but said the current quarter was off to "an exciting start".

Cook said demand for the watch continued to exceed supply, as it has been since pre-orders started earlier this month.

"From a demand point of view, it's hard to gauge when you don't have product in stores," said Cook during a conference call with analysts. Apple is only selling the watch online and in select third-party boutiques due to the wide variety of models and straps for the watch, which could become a logistics nightmare if it offered every permutation at already jam-packed Apple stores.

The most valuable publicly traded US company raised its quarterly dividend 11% to 52 cents per share and boosted its share repurchase programme to $140 billion from $90 billion announced last year.

Together, Apple estimated that would mean returning $200 billion to shareholders by the end of March 2017. It ended the quarter with $193.5 billion in cash and marketable securities, up more than $15 billion from the last quarter.

Even so, this was "a bit lower than expectations," said Bernstein Research analyst Toni Sacconaghi.

Apple said net income for the fiscal second quarter rose to $13.57 billion, or $2.33 per share, from $10.22 billion, or $1.66 per share, a year earlier.

Analysts had expected earnings per share of $2.16 per share, according to Thomson Reuters.

Overall revenue rose to $58.01 billion in the second quarter ended 28 March, from $45.65 billion a year earlier, beating Wall Street's expected revenue of $56 billion.

Apple said it expected fiscal third-quarter revenue of $46-48 billion, in line with analysts' average forecast of $47 billion.

Share