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China boosts Apple’s profits

Apple profits almost doubled in the last quarter, reflecting robust demand for the iPhone in China, as well as purchases of a new version of the iPad tablet, allaying the concerns that fuelled a 12% two-week slump in the stock.

Net income in the fiscal second quarter climbed to $11.6bn (€8.6bn), or $12.30 a share, as revenue increased 59% to $39.2bn, Cupertino, California-based Apple said yesterday in a statement. Analysts had predicted profit of $10.02 a share on revenue of $36.9bn, data compiled by Bloomberg show.

Chief executive Tim Cook is increasingly relying on regions outside the US for sales growth.

Apple sold 35.1 million iPhones in the period after releasing the latest model in China and 21 other countries in January. That helped make up for sales declines from the previous quarter at the top US mobile-phone carriers, Verizon Wireless and AT&T. It also quelled speculation that Apple’s growth pace may slacken.

"China has been a very fast-growing region for them," said Abhey Lamba, an analyst at Mizuho Securities USA in New York.

"There’s more disposable income, strong demand for high-end products and their penetration has been very low in that market. They have been highlighting that region as one of their focus areas."

Apple rose in extended trading, after having dipped 2% to $560.28 at the close in New York. The company’s shares slumped $75.95 since a record close of $636.23 on April 9. The company sold 11.8 million iPads last quarter. Analysts predicted Apple would sell 31.2 million iPhones and 11.9 million iPads, according to average estimates

Apple’s stock came under pressure this month after reports indicated a possible shortage in key components for its mobile devices and showed a decline in iPhone sales at wireless carriers. Some traders also took cues from so-called technical indicators that rely on historical trends to predict stock movements.

Apple dipped below its 50-day average yesterday for the first time since December. A weekly close below that level may signal a decline of as much as 19% from its record high is under way, according to UBS AG.

— Bloomberg

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