It was a merry holiday season for Apple Inc.
Sales of iPhones during the quarter ended Dec. 27 rose 46 percent to 74.5 million units, topping analysts’ average estimate of 64.9 million, according to a company statement on Tuesday.
That helped push Apple’s fiscal first-quarter profit to a record $18 billion, or $3.06 a share, on sales of $74.6 billion. Analysts had predicted profit of $2.60 a share, and revenue of $67.5 billion.
Demand for Apple products soared “to an all-time high,” chief executive officer Tim Cook said in the statement.
The quarter that ends in December is typically the most lucrative period for the Cupertino, Calif., company because of the holiday shopping season. This year, the scrutiny is even higher since the results provide the first official indicator of how a slew of new products – from larger-screened iPhones to slimmer iPads – have performed.
Apple forecast the momentum would continue, with revenue projected to rise to $52 billion to $55 billion from $45.6 billion during the same period a year ago. Gross margins could widen to 38.5 percent to 39.5 percent compared with 39.3 percent a year earlier. Analysts had predicted revenue would rise in the current quarter to $53.7 billion, with margins at 38.6 percent.
“Ultimately it shows that the cycle is going to be more broad and deep than what investors had expected – it will be more successful,” Gene Munster, an analyst at Piper Jaffray, said in advance of the earnings announcement.
Apple shares fell 3.5 percent to $109.13 at the close in New York. Investor enthusiasm for Apple’s new products helped push shares to a new high last year, briefly boosting the company’s market capitalization to more than $700 billion, a first for a U.S. company.
For the just-ended fiscal first quarter, net income rose 38 percent from $13.072 billion a year earlier, while revenue increased 30 percent from $57.6 billion a year ago. The previous profit record of $13.078 billion was set in the fiscal first quarter of 2013.
The larger-screened iPhone 6 and 6 Plus, which debuted in September in the U.S. and arrived in other major markets like China in October, helped boost margins to 39.9 percent. That topped Apple’s forecast in October of 37.5 percent to 38.5 percent and exceeded the average prediction of analysts for 38.5 percent.
Sales were particularly robust in the quarter in China, where revenue rose 70 percent as the company works to expand in the country. Cook has said Apple will open 25 new stores in the country within two years. In the Americas, sales rose 23 percent, while revenue from Europe increased 20 percent, Apple said.
The strength of the U.S. dollar posed a challenge for Apple in places such as Russia, where the company briefly halted online sales during the quarter.
For the fourth consecutive quarter, iPad unit sales fell, dropping 18 percent to 21.4 million units. Mac sales rose 14 percent to 5.5 million units.
New, thinner iPads that were unveiled in October couldn’t stop sales of the tablets from declining, as the market has become saturated and some consumers gravitate to bigger-screen smartphones. Apple is looking to fuel iPad sales by teaming up with International Business Machines Corp. to create programs for iPads and iPhones. Apple is also preparing for a larger- screened iPad this year, Bloomberg News has reported.