Apple Profits Fall - to Return $100 Billion to Shareholders

Apple

Apple reported its second-fiscal quarter financial results, and announced that revenues reached US$43.6 billion compared to US$39.2 billion a year ago.

However, net profit fell to US$9.5 billion when compared to US$11.6 billion a year ago.

Gross margin was 37.5 percent compared to 47.4 percent in the year-ago quarter. International sales accounted for 66 percent of the quarter's revenue.

The Company sold 37.4 million iPhones in the quarter, compared to 35.1 million in the year-ago quarter. Apple also sold 19.5 million iPads during the quarter, compared to 11.8 million in the year-ago quarter. The Company sold just under 4 million Macs, compared to 4 million in the year-ago 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."

Apple also announced a significant increase to its 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 and translates to an average rate of $30 billion per year from the time of the first dividend payment in August 2012 through December 2015.

As part of this program, the Board has increased its share repurchase authorization to $60 billion from the $10 billion level announced last year. This is the largest single share repurchase authorization in history and is expected to be executed by the end of calendar 2015. Apple also expects to utilize about $1 billion annually to net-share-settle vesting restricted stock units.

"Our cash generation remains very strong, with $12.5 billion in cash flow from operations during the quarter and an ending cash balance of $145 billion," said Peter Oppenheimer, Apple's CFO.

Additionally, the Board has approved a 15% increase in the Company's quarterly dividend.

"We continue to generate cash in excess of our needs to operate the business, invest in our future, and maintain flexibility to take advantage of strategic opportunities." Peter Oppenheimer added.