Apple beats Wall Street expectations with almost $18 billion profit in iPhone sales

Apple beats Wall Street expectations with almost $18 billion profit in iPhone sales
Apple beats Wall Street expectations with almost $18 billion profit in iPhone sales

Apple Inc reclaimed the throne as the world's top smartphone seller for the first time in five years on Tuesday, beating out rival Samsung in units shipped for the holiday quarter and boosting revenues with a strong showing for its new, top-of-the-line iPhone 7 Plus.

The iPhone sales numbers, and a profit of almost $18 billion, both handily beat Wall Street expectations, sending its shares up 3 per cent in after-hours trading.

But the gains were tempered by Apple's cautious outlook for the current quarter, which it mainly attributed to the strong US dollar, which hurts companies like Apple that sell a majority of their products overseas, by forcing them to raise prices, which depresses unit sales, or sacrifice margins.

Apple sold 78.29 million iPhones in the fiscal first quarter ended Dec. 31, up from 74.78 million the year before. Analysts on average had expected 77.42 million, according to research firm FactSet StreetAccount.

That beat Samsung Electronics' 77.5 million smartphone sales in the quarter, according to tech data firm Strategy Analytics, the first time that has happened since the fourth quarter of 2011.

The results, which reflected the first full quarter of iPhone 7 sales, come at a time when global demand for smartphones is slowing and cheaper Android alternatives are flooding the market. Apple may also have benefited from Samsung's much-publicized recall of the its fire-prone Galaxy Note 7.

Apple is heavily dependent on the success of iPhones, which account for more than two-thirds of its total revenue.

Also Read: Smartphones with best camera: Apple iPhone 7

Analysts and investors have already set their sights on Apple's 10th-anniversary iPhone, which is expected to feature better touchscreen technology, wireless charging and a shift to a higher-resolution OLED display.

Apple Chief Executive Tim Cook said demand was especially high for the larger iPhone 7 Plus in the fiscal first quarter.

Revenue in the services business - which includes the App Store, Apple Pay and iCloud - jumped 18.4 per cent to $7.17 billion, helped by the popularity of games, including Pokemon Go and Super Mario Run, and increased revenue from subscriptions.

Overseas cash

Cook, who met with lawmakers in Washington last week, said he was "optimistic, given what I am hearing" that there would be changes to the corporate tax reform this year that would allow Apple to bring more than $200 billion in offshore cash back to the United States.

"What we would do with it, let's wait and see," Cook told analysts in response to a question. "We are always looking at acquisitions... There's not a size we wouldn't do just based on the size of it. It's more about the strategic value."

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