Why Apple just posted the biggest quarterly profit ever made by a public company

With a net profit of $18 billion, technology giant Apple as reported the largest quarterly profit ever made by a public company. 

Per Standard and Poor’s, the company’s earnings top the $15.9bn made by ExxonMobil in the second quarter of 2012.

Apple sold 74.5 million iPhones in the three months leading to December 27, or just after the holiday shopping season. The amount of devices sold far surpassed analysts’ expectations. Specifically, demand for Apple’s larger iPhone 6 Plus model helped boost profits and increase how much Apple makes per product by 2% to 39.9%.

Perhaps the biggest reason why Apple was able to achieve these numbers can be attributed to its entry into the Chinese market. Coupled with an updated roster of products, Apple entered the final quarter having just finalized a deal with China’s biggest mobile network, China Mobile. 

At the end of the quarter, the company wound up selling more phones in China than it did in the United States. Specifically, sales in greater China hit $16bn in 2014, a 70% increase from a year earlier, and almost the same amount as the $17bn in sales the company recorded in Europe last year.

Diving into the numbers a bit more, it is worth pointing out that the success of the company’s latest big-screen iPhones have somewhat cannibalized sales of the iPad. Add in a resurgence in laptop sales, as well as a broader market of similar devices, and sales of the iPad fell by 22% in 2014 from a year earlier.

Looking ahead, it appears as though all eyes are on the Apple Watch. Industry experts are a bit skeptical as to whether the company will be able to repeat the success it has seen with its iPhone or, for that matter, the earlier iteration of the iPad, beyond the gadget fan population, especially given the Apple Watch’s high base price of $349. 

Regardless, the company did state that production of the device is on schedule, and that it will begin shipping in April.

Via BBC