Apple Inc. said it will have another record holiday.

The Cupertino, California-based company said fiscal first-quarter sales will be $75.5 billion to $77.5 billion, topping last year’s record. Revenue is being fueled by demand for the latest iPhones and sales in China. Analysts on average projected $77.1 billion, according to data compiled by Bloomberg.

Apple’s sheer size means growth is tougher to achieve. As iPad tablet sales decline and adoption of Apple Watch remains modest, the company’s expansion has become increasingly dependent on demand for new iPhones. The company’s forecast for the current period may help allay concerns that Apple wouldn’t be able to match last year’s record iPhone sales, which followed the long-awaited debut of bigger-screen handsets.

“The law of large numbers is working against them as they get bigger,” said Alex Gauna, an analyst at JPM Securities, who recommends buying the stock. “It gets harder to show growth.”

Apple shares rose 1.7 percent in extended trading, after falling less than 1 percent to $114.55 at the close in New York.

Apple included its holiday outlook in results for the fiscal fourth quarter, which ended on Sept. 26. For that period, the company posted net income of $11.1 billion, or $1.96 a share, while sales rose 22 percent to $51.5 billion. Analysts had predicted earnings of $1.88 a share on sales of $51 billion. The company had $205.7 billion in cash and investments on its balance sheet at the end of the quarter. Gross margin, a measure of profitability, widened to 39.9 percent.

David Fuller's view

Apple (weekly & daily) (est p/e 11.69 & yield 1.82%) rallied in after hours trading following reassuring results, albeit largely in line with forecasts.  The share remains well above its climactic low on 24^th August but has slightly lagged behind the Nasdaq indices since that new floor was established at $92. 

Apple’s estimated p/e is reassuringly low for a cutting-edge technology firm which is also the world’s richest company.  Investors are nervous generally.  They are also wary of China which is Apple’s biggest market and they fret about its heavy dependence on one product – the iconic iPhone. 

These are acceptable risks, in my opinion, as is the prospect that the share may range over the medium term before its relative strength improves once again.