Apple Inc. (Nasdaq:AAPL) turned in another huge quarter, with profits surging more than 30 percent, driven by global sales of the iPhone 6 and 6S. Despite fears that the Chinese stock market crash would cool their love of all things Apple, sales in that country were up 99 percent from the comparable period last year.
Apple posted earnings of $11.1 billion on $51.5 billion revenue, or $1.96 per share, beating analyst projections of $10.7 billion on $51.1 billion in revenue. That compares with $8.5 billion in profit on $42.1 billion in revenue last year. Earnings per share were up 54 cents during the same period.
“Fiscal 2015 was Apple’s most successful year ever, with revenue growing 28 percent to nearly $234 billion. This continued success is the result of our commitment to making the best, most innovative products on earth, and it’s a testament to the tremendous execution by our teams,” Apple CEO Tim Cook said in a statement. “We are heading into the holidays with our strongest product lineup yet, including iPhone 6S and iPhone 6S Plus, Apple Watch with an expanded lineup of cases and bands, the new iPad Pro and the all-new Apple TV, which begins shipping this week.”
Apple’s iPhone accounted for most of its revenue, with 48 million units sold, up 22 percent from 39.3 million during the same period last year. The smartphone came in within analyst expectations of 48 to 49 million units for the period. But analysts are looking to the all-important holiday quarter, when Apple sold 74.5 million iPhones last year.
“There’s a lot of skeptics about what growth could be with the 6S,” Daniel Ives, senior analyst at FBR Capital Markets, said. “But the main headwind has been around China because so much of the growth is tied to China for Apple.”
The U.S. is still Apple’s largest revenue market, but China has followed closely behind with $12.5 billion in revenue, up 99 percent from $6.3 billion in the prior year. IPhone sales were up 120 percent, Cook said during Apple's conference call.
The Apple Watch remains a point of mystery for the company, since it hasn't revealed any specifics on sales since the smartwatch's launch in April. Further obscuring its sales is the addition of a number of new services to Apple’s wheelhouse, including the Apple Music subscription service and the Apple Pay mobile wallet service.
The enterprise market is also a growing revenue area for Apple, accounting for $25 billion this year, up 40 percent from last year. In 2015, Apple has pursued a number of business customers through its partnerships with IBM and Cisco.
The Mac saw sales come in at 5.7 million units, up 3 percent from the 5.5 million sold last year. As expected, the iPad continued its decline, with 9.9 million units sold, down 20 percent from 12.3 million units sold in 2014. Apple is hoping to soften the iPad’s unit sales decline with the higher-priced iPad Pro, set to launch in November. "Nobody is asking about iPad on the call," said Cook during the results conference call.
Apple’s fiscal 2015 fourth-quarter guidance places revenue from $75.5 billion to $77.5 billion and gross margins between 39 percent and 40 percent. It's a conservative estimate compared with the $74.6 billion in revenue it pulled in during the December quarter last year. The next dividend of 52 cents a share will be payable Nov. 12 to shareholders of record by the close of business Nov. 9.