Apple sets record for quarterly profit but expects sales decline

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.

"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 during the quarter, and returned over nine billion US dollars to investors through share repurchases and dividends. We have now completed 153 billion US dollars of our 200 billion US dollar capital return programme."