Apple profit soars 40% on strong iPhone sales

Apple reported record second-quarter profit on Monday, saying its performance was driven by a surge in sales of iPhone and Mac products, as well as strong app sales.

New profit was $13.6 billion US or $2.33 per diluted share, a 40 per cent increase.

Revenue was $58 billion, a 27 per cent increase, with about 69 per cent coming from international markets.

"We are thrilled by the continued strength of iPhone, Mac and the App Store, which drove our best March quarter results ever," said Tim Cook, Apple's CEO. "We're seeing a higher rate of people switching to iPhone than we've experienced in previous cycles, and we're off to an exciting start to the June quarter with the launch of Apple Watch."

"What they're seeingis an increased shift to the iPhone from other platforms, more than any other cycle," said Troy Crandall, vice-president of equities at MacDougall, MacDougall and MacTier.

"I think a lot of that has to do with the fact that they now have a bigger iPhone than what they had in the past that's helping them on the margins, it's helping them on the pricing side and on profits."

By contrast, iPad sales came in weaker, while Mac sales met expectations, while the price has come down.

It is too soon to see the impact of the Apple Watch, which was just launched last week.

Apple will increase its dividend to $2.50 from $1.88, returning to shareholders some of its abundant cash hoard.

Apple is traditionally secretive about its products under development, but some new contenders may be in the works for its June developer conference including the new Apple television, Crandall said.