Dive Brief:
-
Apple Inc. Tuesday said healthy iPhone sales, especially in China, boosted Q4 profits 31%, and CEO Tim Cook said phone sales are expected to continue to grow next quarter as well.
-
Q4 net income was $11.12 billion, up from $8.47 billion year over year, and earnings per share were up to $1.96 from $1.42, in part thanks to the company’s buy-back program. Revenue increased 22% to $51.50 billion from $42.12 billion year over year. Gross margin beat estimates at 39.9%, past the expected range of 38.5% to 39.5%.
-
Cook says the iPhones 6 still have big potential, with many users yet to upgrade to the larger-screened phones, growing sales in China, and an increasing number of Android-phone users still switching to Apple. He cited a 30% increase in such switches, the largest the company has measured.
Dive Insight:
Apple continues to best expectations, aided in part by its premium price as well-to-do consumers in China have taken to the iPhone as a luxury item. Many analysts continue to question the company’s long-term prospects though, apparently doubting that it can maintain its momentum. But Cook insists its momentum should continue. Apple has been able to charge increased prices for its new phones while its rivals are compelled to cut their prices.
The low expectations could help Apple, considering how beating expectations is part of the game on Wall Street.
Despite the price boosts, its larger-screened phones have done better than anticipated, bringing profits to record levels and revenues to unusual continued growth for a publicly traded company, the Wall Street Journal notes.
