Apple reports Q2 earnings: revenue beats estimates, but iPad sales fall far short of prior year
Note: TNM reports on Apple earnings every quarter as – like it or not – the iPad still dominates the tablet market, and therefore the tablet publishing platform
Apple reported its Q2 earnings after the bell this afternoon. The company reported higher revenue than many analysts forecast (what else is new), with revenue at $45.6 billion. iPhone sales came at 43.7 million, well above expectations.
Expect much panic from some tech sectors, but this is not the first time iPad sales came in below the same quarter of the previous year. In Q3 of 2013 (that would be April-June as Apple is not on a calendar fiscal year) sales came in at 14.6 million versus over 17 million the year before. At the time, however, the blame went to moving the introduction of new iPad models to the fall. This year, with sales 3 million units below the prior year… well, there will be tough questions.
Nonetheless, Apple reported $10.2 billion in profit in the quarter, beating the prior year when in reported $9.5 billion. Gross margins came in at a hefty 39.3 percent, and international sales now account for 66 percent of sales (though this may be one area where the iPad is proving weak against Samsung).
Apple also announced a 7-for-1 stock split and a buyback program that it would give $130 billion to shareholders, as CEO Tim Cook continues to play nice with Wall Street.
“We are announcing a significant increase to our capital return program,” said Tim Cook, Apple’s CEO. “We’re confident in Apple’s future and see tremendous value in Apple’s stock, so we’re continuing to allocate the majority of our program to share repurchases. We’re also happy to be increasing our dividend for the second time in less than two years.”
Apple stock is soaring on news that the company did not fail to grow revenue (and all that bribe money to investors). The stock is trading up over 40 points in after hours trading.