Apple beats Street on EPS and revenue; ups quarterly dividend by 15%; ups buybacks to $60 billion

Apple today announced financial results for its fiscal 2013 second quarter ended March 30, 2013.

Apple posted quarterly revenue of $43.6 billion and quarterly net profit of $9.5 billion, or $10.09 per diluted share. These results compare to revenue of $39.2 billion and net profit of $11.6 billion, or $12.30 per diluted share, in the year-ago quarter. Gross margin was 37.5% compared to 47.4% in the year-ago quarter. International sales accounted for 66% of the quarter’s revenue.

Apple 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, in a statement. “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.”

“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, in a statement.

Apple is providing the following guidance for its fiscal 2013 third quarter:

• revenue between $33.5 billion and $35.5 billion
• gross margin between 36 percent and 37 percent
• operating expenses between $3.85 billion and $3.95 billion
• other income/(expense) of $300 million
• tax rate of 26%

MacDailyNews Note: Apple will provide live streaming of its Q2 2013 financial results conference call beginning at 2pm PDT/5pm EDT on April 23, 2013 at www.apple.com/quicktime/qtv/earningsq213.

MacDailyNews will cover the conference call with live notes, as usual, right here.

Ahead of the earnings report, analysts’ consensus estimates for Apple’s fiscal Q213 chad alled for EPS $9.97 and revenue of $42.4 billion.

In January, Apple had provided the following guidance for its fiscal 2013 second quarter:

• revenue between $41 billion and $43 billion
• gross margin between 37.5 percent and 38.5 percent
• operating expenses between $3.8 billion and $3.9 billion
• other income/(expense) of $350 million
• tax rate of 26%

Ahead of the earnings release, shares of Apple Inc. [AAPL] at 4pm EDT today closed up $7.33, or 1.84%, at $406.00.

MacDailyNews Note: Trading in Apple shares was halted just prior to the earnings report and are expected to resume trading at 4:50 pm EDT.

Apple More than Doubles Capital Return Program

Apple today also announced that 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 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.

Additionally, the Board has approved a 15% increase in the Company’s quarterly dividend and today has declared a dividend of $3.05 per common share, payable on May 16, 2013 to shareholders of record as of the close of business on May 13, 2013. Apple is among the largest dividend payers in the world, with annual payments of about $11 billion.

In conjunction with the expanded return of capital program, the Company plans to borrow and expects to announce more details about this in the near future.

The management team and Board of Directors will continue to review each element of the capital return program on an annual basis.

“We are very fortunate to be in a position to more than double the size of the capital return program we announced last year,” said Tim Cook, Apple’s CEO, in a statement. “We believe so strongly that repurchasing our shares represents an attractive use of our capital that we have dedicated the vast majority of the increase in our capital return program to share repurchases.”

“We will continue to return capital to shareholders through dividends, share repurchases, and cash used to net-share-settle vesting RSUs,” said Peter Oppenheimer, Apple’s CFO, in a statement. “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.”

MacDailyNews Take: YKBAID.

70 Comments

        1. Don’t care much for dividends – you would hope they will stabilize the stock by encouraging long term holding by funds – and see what happened since Apple introduced it…
          But I am really excited by the shares buyback program. Go Apple! Reduce the amount of shares available for manipulation by the crooks. Buy when the bears dump the stock trying to drag the price down when they bet against it with options. Let them lose millions of dollars so they leave Apple alone.

      1. @ MikeK: some people on this site refuse to acknowledge any news that they don’t like. Looks to me that Apple’s iPad mini is severely undercutting margins on not just the iPad, but on MacBooks too. And the bungled iMac release didn’t help either.

        Sure hope they elaborate what exactly is in this pipeline — hope to have something more than just a different screen size iDevice.

        1. and some people named mike seem blind to the fact that opinions are like assholes, such that we all have them and sometimes they are clear and lucid, and sometimes they are blocked up and filled with shit. and some people (named mike) for whatever the reason, are unable to see the forest for the trees. break out of it and see the scope, or not; in which case, fuck off and happy trails

          1. Did you have a point, Lee, or are you just pissed that Apple continues to be in coasting mode?

            Can you please explain what, besides hitting expected revenue numbers, was good in today’s conference call? Specifics please.

      2. Wow… what a funny bunch, so much anger… But please, don’t shoot the messenger.. I can assure I’m no troll, I’ve been on this site and a pro-Apple fan for years… I was simply replying to the original poster… And yes, it was good that they beat analysts expectations on EPS and total revenue.. But, falling profit for the first time in over a decade is not a good thing.

        1. Compared to the rest of the computer industry (as they flop around like dying fish with hardly one good idea between them and with plummeting sales) it’s still “insanely great”.

  1. Let’s see what after hours brings us.
    Positives – beat expectations / ~10% revenue growth / Good iPad #s / Dividend and Share buyback increase
    Negatives – lower margins / lower EPS YOY / <4M Macs

      1. Same here. I was wrong. I really thought the stock would plummet based on all the bad news reports that were going around. Good for those brave enough to purchase more shares before earnings call. I don’t have any spare money to take that sort of risk. I’m very glad to see a dividend increase which, in theory, would allow me to buy a high-end iMac every quarter. I still don’t think things are going to change much about Wall Street’s expectations of Apple. I won’t feel satisfied until Apple’s P/E gets back into the 12s and only then will I feel investors are gaining some confidence in the company.

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