) released its highly anticipated fiscal second-quarter results
on Tuesday after the closing bell.
The company reported a lower profit for the period, but sales
were up by more than 11 percent. Margins fell sharply in the
second-quarter, but investors are pushing the stock higher after
the company raised its dividend and announced a large share
Apple also provided sales guidance for the third-quarter which
is well-below analysts' consensus estimates. The light forecast,
however, should not come as a surprise to Wall Street as Apple is
well-known for its conservative guidance. The stock was last
trading up around 5 percent to $427 in the after-hours
Net income for the second-quarter fell 18 percent to $9.5
billion or $10.09 per share, compared to $11.6 billion or $12.30
per share, in last year's corresponding quarter. This beat Wall
Street consensus estimates of $10.07 per share by a whisker.
Total sales for the second-quarter were $43.60 billion from
$39.19 billion last year. This also came in just ahead of
analysts' consensus estimates of $42.59 billion.
The lower profit in the period despite a better than 11
percent sales jump was due to shrinking margins amid rising
competition in the smartphone and tablet markets. Gross margin
plunged to 37.5 percent from 47.4 percent in last year's
iPhone sales in the quarter rose to 37.4 million units from
35.1 million a year ago. The company sold 19.5 million iPads in
the quarter, a better than 65 percent gain in unit sales. Mac
sales came in at just under 4 million versus 4 million Mac sales
in last year's second-quarter.
We are pleased to report record March quarter revenue thanks
to continued strong performance of iPhone and iPad," said Tim
Cook, Apple's CEO. "Our teams are hard at work on some amazing
new hardware, software and services, and we are very excited
about the products in our pipeline."
The company said that its cash position climbed to a record
$145 billion and announced a 15 percent increase in its quarterly
dividend to $3.05 per share. Apple also authorized a $50 billion
increase in its existing $10 billion share buyback program.
Overall, the Cupertino, California technology giant is more
than doubling its capital return program and also said that it
will borrow money to increase returns to shareholders.
Apple said that more details on its plans will be released in
the near future. Apple also expects to spend around $1 billion
annually to net-share-settle vesting restricted stock units.
"We are very fortunate to be in a position to more than double
the size of the capital return program we announced last year,"
said Tim Cook, Apple's CEO. "We believe so strongly that
repurchasing our shares represents an attractive use of our
capital that we have dedicated the vast majority of the increase
in our capital return program to share repurchases."
Looking ahead to the fiscal third-quarter, Apple guided for
revenue of $33.5 billion to $35.5 billion and gross margins of 36
percent to 37 percent. This is well below current Wall Street
consensus sales estimates of $39.34 billion. Operating expenses
are expected to be between $3.85 billion and $3.95 billion.
While the company's guidance is well below expectations,
investors have come to expect this from Apple and are largely
discounting the company's Q3 forecast.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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