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Apple Profit Tops Estimate; To Return $100 Bln To Shareholders

Apple Profit Tops Estimate; To Return $100 Bln To Shareholders
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4/23/2013 6:11 PM ET

Apple Inc. (AAPL: Quote) said Tuesday after the markets closed that its second quarter profit fell 18% from last year, hurt mainly by weaker margins even as revenue increased 11% on the back of strong sales of its iPhones and iPad multimedia devices.

However, the company's quarterly earnings per share narrowly beat analysts' estimate, and its quarterly revenue breezed past analysts' expectations.

At the same time, the company forecast third quarter revenue well below analysts' current consensus estimate.

Additionally, Apple said its Board of Directors has authorized a significant increase to the company's program to return capital to shareholders. The company expects to utilize a total of $100 billion of cash under the expanded program by the end of calendar 2015. This represents a $55 billion increase to the program announced last year.

The company's board has increased its share repurchase authorization to $60 billion from the $10 billion level announced last year. The share repurchase is expected to be executed by the end of calendar 2015.

The company's board has also approved a 15% increase in the quarterly dividend, and has declared a dividend of $3.05 per common share, payable on May 16 to shareholders of record on May 13.

In mid-March 2012, Apple announced plans to again start paying quarterly dividends, and also set a $10 billion share repurchase program.

Apple shares are currently gaining 1.85% in after hours trading after closing the day's regular trading session at $406.13, up $7.46 or 1.87%. The company's shares have fallen 43.5% since reaching their all time high of $705.07 on September 21, 2012.

Second quarter revenue grew in all geographical regions of the company. America revenue grew 7%, while Europe revenue rose 11% and Greater China revenue increased 8%. Japan revenue surged 19%, while rest of Asia-Pacific revenue jumped 26% from a year earlier.

Apple sold 37.4 million iPhones in the second quarter, up 7% from 35.1 million sold in the same quarter last year.

The company's iPad sales jumped 65% to19.5 million units in the second quarter from11.8 million a year ago.

The company sold 3.95 million Macs in the quarter, down 2% from 4.02 million in the year-ago quarter.

Second quarter sales of the company's iPod music players dropped 27% to 5.6 million units.

"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."

For the second quarter ended March 30, 2013, the Cupertino, California-based computing and electronics company reported net income of $9.5 billion or $10.09 per share, compared to $11.6 billion or $12.30 per share for the year-ago quarter.

On average, 48 analysts polled by Thomson Reuters expected the company to earn $10.07 per share for the second quarter.

This marks the first year-over-year decline in the company's quartrly profit in a decade.

Gross margin for the quarter shrank to 37.5% from 47.4% in the prior year quarter, while operating margin for the quarter narrowed to 28.8% from 39.3% a year earlier.

Revenue for the second quarter rose 11% to $43.60 billion from $39.19 billion in the same quarter last year. Forty-five analysts had a consensus revenue estimate of $42.59 billion for the second quarter.

Looking forward to the third quarter, the company forecast revenue of $33.5 billion to $35.5 billion and gross margin of 36% to 37%. Analysts currently expect the company to post revenue of $39.34 billion for the third quarter.

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by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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