Ap­ple profit soars on iPhone and main­land China sales jump


Ap­ple on Mon­day re­ported a sharp rise in its quar­terly profit, lifted by ro­bust sales of its iPhones and a jump in rev­enue from China.

The Cal­i­for­nia tech gi­ant said profit rose 33 per­cent from a year ago to US$13.6 bil­lion, lifted by sales of 61 mil­lion iPhones in the first three months of the year.

Rev­enue in­creased 27 per­cent from the same pe­riod a year ago to US$58.01 bil­lion, Ap­ple said.

A ma­jor con­trib­u­tor was the ex­pan­sion of iPhone sales in China. Rev­enue for “greater China” leapt 71 per­cent to US$16.8 bil­lion in the quar­ter, al­low­ing the re­gion to over­take Europe as Ap­ple’s sec­ond­largest mar­ket.

“We are thrilled by the con­tin­ued strength of iPhone, Mac and the App Store, which drove our best March quar­ter re­sults ever,” said chief ex­ec­u­tive Tim Cook.

“We’re see­ing a higher rate of peo­ple switch­ing to iPhone than we’ve ex­pe­ri­enced in pre­vi­ous cy­cles, and we’re off to an ex­cit­ing start to the June quar­ter with the launch of Ap­ple Watch.”

The re­sults for the sec­ond fis­cal quar­ter ex­clude the new Ap­ple smart­watch, which be­gan de­liv­er­ies last week in nine coun­tries.

Ap­ple of­fered no fig­ures for Ap­ple Watch sales, but Cook said dur­ing a con­fer­ence call that the re­sponse has been “over­whelm­ingly pos­i­tive.”

“It’s been re­ally great to see the re­ac­tion of cus­tomers since their

watches ar­rived Fri­day,” he said.

Shar­ing with Share­hold­ers

Ap­ple said separately it was adding US$50 bil­lion to its share buy­back pro­gram and boost­ing its div­i­dend, in an ap­par­ent con­ces­sion to share­hold­ers fear­ing the com­pany is stock­pil­ing too much cash.

Ap­ple said its board has in­creased its share re­pur­chase au­tho­riza­tion to US$140 bil­lion from the US$90 bil­lion level an­nounced last year. The buy­backs in­crease value for share­hold­ers by re­duc­ing the num­ber of out­stand­ing shares.

The board also ap­proved an 11-per­cent in­crease in quar­terly div­i­dends to 52 cents per share.

The moves will only modestly im­pact Ap­ple’s cash re­serves, which rose to more than US$193 bil­lion in the past quar­ter.

“We be­lieve Ap­ple has a bright fu­ture ahead, and the un­prece­dented size of our cap­i­tal re­turn pro­gram re­flects that strong con­fi­dence,” said Cook.

“While most of our pro­gram will fo­cus on buy­ing back shares, we know that the div­i­dend is very im­por­tant to many of our in­vestors, so we’re rais­ing it for the third time in less than three years.”

Ap­ple, al­ready the largest pub­licly traded com­pany by mar­ket value, saw its shares rise in af­ter-mar­ket trade by 1.5 per­cent to US$134.61 af­ter the bet­ter-than-ex­pected re­sults, push­ing its cap­i­tal­iza­tion to more than US$770 bil­lion.

Brian White, an­a­lyst at Can­tor Fitzger­ald, said the re­sults were pos­i­tive and sug­gest Ap­ple is still grow­ing at a healthy pace.

“Given the strength of this iPhone cy­cle, ex­panded cash dis­tri­bu­tion, and en­try into the first new prod­uct cat­e­gory in five years with Ap­ple Watch, we be­lieve Ap­ple re­mains early in this trans­for­ma­tional cy­cle,” he said in a note to clients.

Ap­ple’s re­sults come af­ter hugely suc­cess­ful launch last year of its large-screen iPhones, help­ing it re­gain mar­ket share lost to ri­vals like Sam­sung and oth­ers us­ing the Google An­droid plat­form.

Ap­ple’s re­port showed a 40 per­cent jump in iPhone sales com­pared with the same pe­riod a year ago.

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