Apple set to report record Christmas sales

Apple is poised to record its first profit gain in more than a year after shoppers who shunned clothes and purses during the holidays shelled out for iPads and iPhones. The world's most valuable company is projected to report 5 per cent sales growth and a 2 per cent profit increase today for its fiscal first quarter, typically the period when Apple generates its biggest chunk of revenue.

Chief executive officer Tim Cook is under pressure to reverse sliding profits, hurt by the dearth of new product categories since the iPad's 2010 debut, and to return more cash to shareholders such as activist Carl Icahn. The company likely benefited from the latest versions of the iPhone and iPad, which were released late last year, helping Apple eke out gains during a dismal period for retailers as varied as Best Buy to Victoria's Secret owner L Brands. That may lead to a profit upswing over the next quarters, according to data compiled by Bloomberg, amid new iPhone sales in China.

“Everyone is looking for signs that the worst is behind Apple,” said Alex Gauna, an analyst at JMP Securities in San Francisco, who has the equivalent of a hold rating on the stock.

Apple shares gained 5.4 per cent last year, trailing the 30 per cent rise of the Standard and Poor’s 500 Index. The stock closed down 1.8 per cent to $546.07 at the close in New York on January 24th.

Kristin Huguet, a spokeswoman for Cupertino, California- based Apple, declined to comment. IPhone, IPad Revenue gains are set to be driven by sales of the iPhone 5s and 5c and the iPad Air and new iPad mini, whichApple refreshed late last year.

The company also added new partners to sell its smartphones, including Japan's NTT Docomo Inc. Morgan Stanley's Katy Huberty estimates

Apple sold 54 million to 55 million iPhones and as many as 26 million iPads over the quarter, which are both records. Huberty wrote in a research note on January 21st that Apple is at the “beginning of a new cycle of growth and innovation.” She has the equivalent of a buy rating on the stock.

“Apple products were a holiday gift of choice,” said Brian Marshall, an analyst at ISI Group, who has a buy rating on the stock.

Meanwhile Taiwan's Foxconn Technology Group, the major supplier of Apple's iPhone and iPad products, said it is considering expanding manufacturing to the United States in a move that could open up new prospects for business with Apple.

“The US is a must-go market,” said chairman Terry Gou, speaking at the group’s annual year-end party on Sunday. He said many customers and partners hope Foxconn, the world’s largest contract manufacturer of electronic goods, will set up manufacturing facilities in the US Foxconn’s ambitious growth plans could see it lift annual revenue to T$10 trillion ($333 billion) a decade from now.

Bloomberg