iPhone sales dip but profits rise in Apple's latest financial results

Tim Maytom

Apple has released its Q1 results, covering the last three months of 2017, revealing record quarterly profits of $20bn (£14.2bn) despite a year-on-year decrease in the number of iPhones sold.

Strong growth in Japan and Europe, as well as higher prices and the release of the premium iPhone X, helped alleviate the drop in models shipped, with quarterly revenues climbing by 13 per cent compared to Q1 2017 and hitting a record $88.3bn.

Earnings per share for the quarter were $3.89, up 16 per cent to another all-time record for the firm. Shares in Apple rose 3.3 per cent in after-hours trading, buoyed not just by the results, but also by hints from Apple that it was planning on returning more than half of the $285bn it currently holds in cash to shareholders.

"Over time, we are trying to target a capital structure that is approximately net neutral," said Luca Maestri, chief financial officer at Apple, in an interview with Reuters. "We will have approximately the same level of cash and debt on the balance sheet."

While the promise of a dividend may keep shareholders happy in the short term, investor concerns remain that demand is dropping for Apple's products. The company's sales forecast for Q2 2018 is weaker than expected, and the firm's continued focus on premium handsets has restricted its growth in emerging markets.

"We're thrilled to report the biggest quarter in Apple's history, with broad-based growth that included the highest revenue ever from a new iPhone lineup," said Tim Cook, CEO of Apple, commenting on the results. "iPhone X surpassed our expectations and has been our top-selling iPhone every week since it shipped in November.

"We've also achieved a significant milestone with our active installed base of devices reaching 1.3bn in January. That's an increaase of 30 per cent in just two years, which is a testament to the popularity of our products and the loyalty and satisfaction of our customers."