Apple breaks more profit records, but it comes with a warning

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Apple has reported the largest single quarter profit in corporate history, but is predicting the first ever decline in iPhone sales later this year.

The California-based technology giant posted a profit for the quarter ending December 26 of 18.4 billion US dollars (£12.8bn), having sold 74.8 million iPhones in the three-month period.

However, there was iPhone sales growth of just 0.4%, the slowest rate in the history of the Apple smartphone, and a huge drop compared to the 46% growth in sales in the same quarter last year.

But the company’s performance was still enough to break the profit record set this time last year, with sales up 56% on the last quarter too.

Apple chief Tim Cook said: “Our team delivered Apple’s biggest quarter ever, thanks to the world’s most innovative products and all-time record sales of iPhone, Apple Watch and Apple TV.

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“The growth of our Services business accelerated during the quarter to produce record results, and our installed base recently crossed a major milestone of one billion active devices.”

All analyst eyes were also on Apple’s guidance for the next quarter, and the company confirmed rumours that it would suggest a drop in revenue – offering guidance that revenue for the second quarter of 2016 would be between 50 and 53 billion US dollars (£35-37bn), down from 58 billion (£40bn) in the same quarter last year.

The results also revealed that Apple sold just over 16 million iPads, as well as 5.3 million Macs.

Luca Maestri, Apple’s finance officer added: “Our record sales and strong margins drove all-time records for net income and EPS in spite of a very difficult macroeconomic environment.

“We generated operating cash flow of 27.5 billion US dollars (£19bn) during the quarter, and returned over 9 billion US dollars (£6.2bn) to investors through share repurchases and dividends. We have now completed 153 billion dollars (£106bn) of our 200 billion dollar (£139bn) capital return programme.”

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