NEWS

Apple profits top expectations on strong iPhone, iPad sales

04/23/2013 06:26 EDT | Updated 06/23/2013 05:12 EDT
Apple Inc. reported better than expected second quarter profits on Tuesday as sales of its popular iPhones and iPads topped market forecasts. It also raised its dividend and dramatically boosted its share buyback program.

The company said earnings were $9.5 billion US, a drop of 18 per cent from the same quarter last year. That profit amounted to $10.09 per share, slightly ahead of the $10.00 consensus of analysts.

Revenues rose 11 per cent to $43.6 billion. That was above the market's consensus of $42.3 billion.

The company also boosted its quarterly dividend 15 per cent to $3.05 per share and announced it would put another $50 billion into its share buyback plan.

Ahead of the earnings release, the stock closed Tuesday at $406.13 in Nasdaq trading, up 1.9 per cent on the day. Following a brief trading halt after the market close, Apple shares shot up as much as $20, but those gains later faded away.

Apple said it shipped 37.4 million iPhones and 19.5 million iPads in the quarter that ended March 30. Both sales numbers were ahead of market expectations. Mac shipments in the quarter came in at just under 4 million units.

CEO promises 'amazing' new products

"We are pleased to report record March quarter revenue thanks to continued strong performance of iPhone and iPad," said Apple CEO Tim Cook.

"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."

This was considered one of the most crucial quarters in Apple's history. The company has seen its stock plummet 40 per cent from its all-time high just above $705 last September.

In a conference call with analysts following the earnings release, Cook acknowledged that the stock plunge "has been very frustrating for all of us." But he said the company's main focus is not on boosting its stock price.

"The most important objective for Apple will always be creating innovative products," he said.

Apple and its CEO are under enormous pressure to come up with new products in an increasingly competitive field, with some investors questioning if Cook can muster the same string of innovative successes that his noted predecessor came up with. Former CEO Steve Jobs died in October 2011.

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