Apple beats earnings estimates, nearly doubles revenue in China

Consumers keep coming back for the iPhone.

Apple Inc. reported a 30% increase in quarterly profit after posting strong sales of its iconic phone and nearly doubling revenue in China, its second-largest market.

The Cupertino, Calif., tech giant said Tuesday that it sold 48 million iPhones during its fiscal fourth quarter ending Sept. 26, up 22% from a year ago.

That spurred revenue of $51.5 billion for the world’s most profitable company, up from $42.14 billion a year earlier.

Analysts surveyed by Thomson Reuters predicted revenue of $51.11 billion.

Apple also beat expectations with earnings per share of $1.96 versus a forecast of $1.88 a share in the Thomson Reuters survey.

Profit stood at $11.12 billion, up from $8.47 billion a year ago.

Company shares fell 0.6% to $114.55 Tuesday.

Apple’s fourth quarter was boosted by its new iPhone 6s and iPhone 6s Plus, which include more powerful processors. The popular smartphone accounts for about two-thirds of Apple’s revenue.

Apple said it expects revenue between $75.5 billion and $77.5 billion in the first fiscal quarter of 2016 -- a crucial period that encompasses holiday sales. That’s about in line with the $77 billion analysts had forecast for company revenue for the quarter.

Wall Street “was fearing a soft guidance and instead got a good December outlook, which should help turn the tide positive heading into 2016 in our opinion,” said FBR & Co. analyst Daniel Ives.

Not all devices were as successful as the iPhone. The company said iPad sales fell 20% from a year earlier to 9.88 million units, the seventh consecutive quarter the tablet has seen shrinking sales.

In brief comments Tuesday, Apple CEO Tim Cook did not reveal numbers for the Apple Watch, saying only that sales were increasing sequentially and that they had exceeded his expectations since it was launched in April.

Cook said revenue in Greater China (which includes China, Hong Kong and Taiwan) had nearly doubled year-over-year to $12.51 billion despite the slowing economy there and the declining value of the Chinese currency. Cook said Apple was still on track to open 40 stores in the market by the middle of next year.

About a quarter of Apple’s business comes from China, which saw the newest iPhones go on sale at the same time as the U.S. market for the first time in September.

Sales of the device in China outpaced sales in the U.S. for the first time, the company reported in the second quarter.

China is expected to be Apple’s biggest market by 2017.

“Apple’s exposure to China is huge relative to most big companies,” said Andy Hargreaves, an analyst for Pacific Crest Securities. “They’ve been extraordinarily successful there. So yes, what happens in China is hugely important.”

Twitter: @dhpierson

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