Cupertino profit dip 20%
For the first time in 10 years, Apple reported a slump in profits, which dipped 18%, it confirmed today.
Cupertino’s Profits for second quarter slipped to $9.5 billion for quarter ended March 30, 2013 – down from $11.6 bn a year prior.
However, revenue rose 11% to $43.6 bn compared to $39.2 bn same qr 2012, suggesting margins are shrinking.
Gross margin fell a massive 10% to 37.5% compared to 47.4% a year-ago.
International sales accounted for massive 66% of Apple’s revenue, with China its No. 2 market outside of the US.
Tim Cook, Apple’s CEO, said “record” quarterly revenue was “thanks to continued strong performance of iPhone and iPad.”
not giving away anything about new Apple products – (iPhone 5S/6
perhaps?) he said Cupertino’s “teams are hard at work on some amazing
new hardware, software, and services”
“We are very excited about the products in our pipeline.”
Apple sales for the quarter exceeded analysts expectations however, selling 37.4m iPhones – over 2 million more than same time 2012 – and sold close to double the number of iPads – 19.5m, compared to 11.8 m last year.
Mac sales were static – and sold just under 4 million.
However, the results and Q3 outlook disappointed analysts in particular well known Jefferies analyst Peter Misek who said its guidance “was even lower than our well-below consensus estimates highlighting GM [gross margin] pressure and the likely lack of new product launches” in a note to investor, reports MarketWatch.
However, investors rallied after the announcement, after Cupertino announced a raising of its dividend to 15% and a share buyback program boosted by $50 – from $10 m currently, and stock lifted temporarily by 5% but dipped to $403.95 in after hours trading.
Cook also admitted Apple is feeling the pinch from its falling share price, which has slumped from its previous high of $700.
“The decline in Apple’s stock price over the last couple of quarters has been very frustrating to all of us.”
“But Apple remains very strong and we will continue to do what we do best,” he said.
Apple has $12.5 billion in cash flow and is sitting on a cash pile of $145 billion, said Peter Oppenheimer, Apple’s CFO.
Apple guidance for third quarter projected revenue to slump significantly to $33.5 bn – $35.5 bn and gross margin to stay at same level as Q2 at 36%-37%.
Cupertino also announced a raising of its dividend to 15% and a share buyback program boosted by $50 – from $10 m currently.