Apple Earnings Ahead of Estimates, but Company Sees Sales Dip Ahead
Apple on Wednesday reported quarterly sales and earnings that easily topped analyst estimates but said it expects considerably lower revenue in the current quarter.
The company also announced a 7-for-1 stock split and a plan to increase share buybacks by $30 billion and cash dividends by 8 percent. Shares surged more than 8 percent in after-hours trading.
The results reflected far better than expected sales of iPhones, but fell short of Wall Street targets on iPad sales.
The company reported earnings of $10.2 billion, or $11.62 per share, on revenue of $45.6 billion. Analysts had expected per-share earnings of roughly $10.15 per share and revenue of around $43.7 billion.
“We’re very proud of our quarterly results, especially our strong iPhone sales and record revenue from services,” Apple CEO Tim Cook said in a statement. “We’re eagerly looking forward to introducing more new products and services that only Apple could bring to market.”
During the March quarter, Apple sold 43.7 million iPhones and 16.35 million iPads, along with 4.1 million Macs.
Analysts had been looking for iPhone shipments of around 38 million iPad shipments of around 20 million — roughly flat from a year ago. Instead, iPhone sales were up 17 percent from a year ago, while iPad unit sales dipped 16 percent. Mac sales were up 5 percent from a year ago.
For the current quarter, which ends in June, Apple said it expects a drop in revenue to between $36 billion and $38 billion.
Apple stock dipped in late trading, closing at $524.75, down $6.95 or 1.31 percent.
Apple had said in January to expect revenue of between $42 billion and $44 billion, along with gross profit margins of 37 percent. (The company used to be notorious for providing exceedingly low guidance and then massively exceeding it, but started offering a more accurate forecast three quarters ago.)
The earnings report comes amid concerns that demand for iPhones and iPads is starting to peak amid a more saturated market and a shift toward more moderately priced smartphones.
The company is expected to offer somewhat more details on its business in a conference call with analysts. Re/code will have live coverage of the call, which begins at about 2 pm PT.