Apple reported profits of more than $20 billion Thursday evening, thanks in part to the higher selling price of the iPhone X, and said it could spend billions on acquisitions, dividends and buybacks in 2018 and beyond.
Apple Inc. (Nasdaq: AAPL) reported revenue of $88.3 billion for the quarter, up 13% year-on-year, and net income of almost $20.1 billion, up by 12.2% from a year ago. Diluted earnings per share were up at $3.89, beating Wall Street expectations.
Apple, however, sold fewer iPhones over the hoilday quarter than in the equivalent quarter a year earlier, 77.3 million compared with 78.2 million units.
Sales were lower because of the shorter than usual year-end quarter. "As you know, the December quarter a year ago spanned 14 weeks compared to 13 weeks this year, which is important to consider as we have set the underlying performance of our business this year," CFO Luca Maestri said on the earnings call.
Nonetheless, Apple still made more money because the $1,000 iPhone X bumped up the average selling price of its devices from $695 last year to $796 in the final quarter of the year.
"iPhone X was the best-selling smartphone in the world in the December quarter according to Canalys, and it has been our top-selling phone every week since it launched," CEO Tim Cook said on the earnings call. He also noted "Apple's active installed base" reached an all-time high of 1.3 billion in January.
US corporate tax changes were also a big issue on the call, with Maestri saying the company wants to get to "net cash zero." This means the company has up to $163 billion it could spend on M&A, dividends or share buybacks.
"We're going to be very thoughtful and deliberate about it," the CFO said, saying capital allocation plans would be laid out in the March quarter. In 2017, Apple bought 19 companies all told.
The company estimates it will be making a corporate income tax payment of around $38 billion to the US government on cumulative past foreign earnings.
Apple's shares were trading up $5.71 -- or 3.40% -- at $167.78 after hours on Thursday.
— Dan Jones, Mobile Editor, Light Reading