Apple Inc (NASDAQ:APPL) posted a record quarterly profit that beat market forecasts as higher prices offset fewer iPhone sales.
Profits in the final three months of the year rose to US$20.1bn, up from US$17.8bn the same period a year ago and above analysts’ estimates of US$19bn.
The results included sales of the iPhone X for the first time. The device, which starts at price of US$999, helped lift average selling prices despite a 1% decline in the overall number of iPhones sold in the period to 77.3mln.
IPhone X sales top expectations
Chief executive Tim Cook appeared to dismiss rumours of sluggish sales of the iPhone X by saying it has been in demand since its launch.
“iPhone X surpassed our expectations and has been our top selling iPhone every week since it shipped in November,” Cook said.
Ahead of the results, media reports said Apple was going to cut production of the iPhone X after disappointing sales in recent weeks.
Shares in Apple rose 3.4% to US$167.7 each in after-hours trade.
Apple's outlook disappoints
However, the company issued a weaker-than-expected sales forecast for the next quarter. It said it expects revenues of between US$60bn and US$62bn, below the U$65.7bn analysts have forecast.
Apple also predicts profit margins of 38% to 38.5%, compared to the 38.9% expected.
The disappointing guidance was interpreted by analysts to mean that Apple expects to sell fewer phones than expected or to sell phones that are either more expensive to make or have lower prices.
CFO reassures investors on guidance
Apple’s chief financial officer Luca Maestri tried to soothe investors’ concerns about the outlook in a conference call.
"We typically don't go into this level of detail but I think it's important this quarter to give you additional color, and maybe the two most important messages are that we believe iPhone revenue will grow double-digits as compared to last year during the March quarter and also and, importantly, that iPhone sell-through growth on a year-over-year basis will be actually accelerating during the March quarter as compared to the December," Maestri said.