Apple profit soars as company sells 39M new iPhones
SAN FRANCISCO — Record-setting iPhone sales helped Apple ring up sterling results on Monday, crushing analysts' estimates.
The company said its fiscal fourth-quarter revenue jumped 12% to $42.1 billion from the same quarter a year ago.
Profits were $8.5 billion (or $1.42 per share), compared with $7.5 billion ($1.18) last year.
Analysts polled by Thomson Reuters expected earnings of $1.30 per share, up 10% from last year's fiscal fourth quarter. They forecast sales of $39.85 billion, a 6% gain from a year ago.
The results sent Apple shares up 1% in after-hours trading Monday, $100.89. Apple announced its quarterly results after markets closed.
For the quarter, Apple said it sold 39.3 million iPhones. It sold 10 million of the new phones in their first three days on sale, beginning Sept. 19.
Analysts had predicted sales of 37 million to 38 million iPhones, resulting in revenue of $37 billion to $40 billion. They expect Apple to sell 60 million new iPhones this year.
Apple says it expects the new, larger-screened iPhone 6 Pluses to spike sales at least 10% during the crucial holiday quarter.
Despite hype for the new iPhone, Google's Android system dominates, with 50.5% of smartphone users in 2013, to 40% for iPhone, according to researcher eMarketer.
The quarterly results came the same day Apple launched its new mobile payments system, Apple Pay, with retailers such as McDonald's, Subway, Macy's, Panera Bread and Whole Foods Market allowing consumers to pay for goods.
The system only works with the new iPhone 6 and 6 Plus. The new iPad Air 2 and iPad Mini 3, out Friday, will work with Apple Pay for online payments only.
Macintosh sales provided another pleasant surprise Monday — 5.5 million, up 20% from the year-ago quarter.
It wasn't all sunny for Apple. Sales of iPad were down 13%, to 12.3 million for the quarter.
The iPad, whose sales have declined for months amid stiff competition, is expected to sink to 51.8% from 54.5% last year, says eMarketer.
Though Apple refreshed the iPad lineup last week, it left some analysts underwhelmed.
"Faster and thinner may prove to be a less compelling reason to upgrade going forward," says Colin Gillis, an analyst with BGC Financial.
In a conference call following Apple's results, CEO Tim Cook acknowledged sales of iPhones and Macs may be cannibalizing iPad sales, but he said he was not worried about the long term.
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