SAN FRANCISCO • Apple has reported a US$20 billion (S$26.2 billion) profit in a record-setting quarter and said sales of its newest iPhone X smartphone were better than expected.
Revenue in the final three months of last year increased 13 per cent to US$88.3 billion, according to the California-based technology giant.
"We're thrilled to report the biggest quarter in Apple's history, with broad-based growth that included the highest revenue from a new iPhone line-up," said Apple chief executive Tim Cook on Thursday.
"iPhone X surpassed our expectations and has been our top-selling iPhone every week since it shipped in November."
However, Apple reported that overall iPhone sales in the quarter of 77.3 million units were about a million fewer than the same period a year earlier. But iPhone revenues rose 13 per cent from a year ago, suggesting that its newer models were gaining traction.
The earnings come amid concerns over weak demand for the newest and most expensive model, the iPhone X, the 10th anniversary edition of the iconic smartphone.
Apple also forecast that revenue in the current quarter would be between US$60 billion and US$62 billion in an outlook less rosy than analysts had expected.
Apple shares dipped and then rose 2 per cent to US$171.08 in after-market trades that followed release of the earnings figures.
Despite Apple's spectacular trajectory in the decade since the introduction of the iPhone, the titan is facing challenges on whether it can continue growth.
Apple's image, meanwhile, has been bruised by revelations that it updated its mobile software to slow the performance of old iPhones as batteries weaken with age.
The latest earnings report showed gains for Apple in all its regions, including Greater China, where it has faced challenges.
While the iPhone delivered the bulk of its revenues at US$61.6 billion in the quarter, the key services segment saw revenue growth of 18 per cent to US$8.5 billion, while revenues from other products, including the Apple Watch and Apple TV, rose 36 per cent to US$5.5 billion.
Apple said its cash pile grew to US$285 billion, with much of it stashed overseas. It said last month it would bring back most of its profits from abroad to take advantage of a favourable tax rate in legislation approved by Congress last year.
The repatriation will result in a tax bill of some US$38 billion, but also would free up big chunks of money for investment.
For the latest quarter - the fiscal first quarter for the three months to Dec 30 - Apple set aside US$6.97 billion for taxes.
AGENCE FRANCE-PRESSE