Apple Profit Sets Record on Strong iPhone Sales

Apple is on pace for its best fiscal year ever with a projected profit of $86 billion for the 12-month period ending in September, according to an average forecast of analysts surveyed by FactSet. That would be about 51% better than last year’s record; a year ago, analysts were predicting what now seems like a paltry 11% gain.

Investors came into 2021 expecting big things, thanks to the iPhone 12 lineup and its 5G cellular connectivity. Chief Executive

Tim Cook

has outdone even lofty expectations, benefiting from two developments: the first iPhone in three years with technological advances perceived by longtime customers as worth a new purchase, and stronger-than-expected demand for laptops and iPad tablets by workers and students stuck at home during the coronavirus pandemic.

Sales from iPhones rose 50% to $39.6 billion during the April-to-June period compared with a year earlier.

While iPhone sales traditionally fall off in the year after a big launch, the excitement of 5G may carry through fiscal 2022. “With close to 1 billion iPhones in use globally, the 5G upgrade opportunity remains significant, with current U.S. carrier promotions an added tailwind,” William Power, an analyst for Robert W. Baird & Co., wrote in a note to investors this week.

For the year ending in September, analysts were predicting Apple’s total iPhone revenue would rise 36% compared with fiscal 2020 and stay at roughly the same level in 2022 before declining a bit in 2023.

A top concern for investors when Mr. Cook addresses Wall Street analysts Tuesday will be his outlook for the current quarter and details about how prepared the company is to handle the microprocessor shortage roiling the tech and auto industries.

So far, Apple has been able to avoid big disruptions. But in April, the company cautioned that the usual drop in sales in the third quarter compared with the second quarter would be greater than normal. At the time, Chief Financial Officer Luca Maestri attributed this, in part, to an expected chip shortage, hurting sales by as much as $4 billion. As it turned out, sales fell 8.5% from quarter to quarter.

Sales in fiscal 2019 fell 7% between the second and third quarters while declining 13% in those periods in 2018. The outlier was last year when sales fueled by pandemic buying rose 2.4%.

Part of the drop between this year’s quarters is because of stronger-than-usual demand for the iPhone in the quarter that ended in March. The launch of the iPhone 12 lineup with 5G cellular connectivity was delayed in 2020 because of the outbreak of Covid-19.

During the pandemic, Apple stopped giving detailed quarterly guidance about sales expectations. Still, investors and analysts will be closely monitoring Mr. Cook’s language to gauge his confidence as the company heads toward the expected September launch of its latest iPhone.

Meanwhile, the company has delayed plans to pull workers back into the office until at least October amid growing cases of Covid-19.

Write to Tim Higgins at Tim.Higgins@WSJ.com