Apple Inc.'s message to shareholders: We're “bucking the tide.”
In the U.S., in China and across the world, the world's most valuable public company is outpacing peers. Apple generated $13.6 billion in profit during the first three months of the year, its best corporate second quarter ever, the company announced Monday. That was a 33% jump from $10.2 billion in the same period last year.
Strong demand for the iPhone 6 and its much larger screen than its predecessors drove the big gain, especially in China, where Lunar New Year's celebrations produced a burst of gift-giving and a 70% year-over-year jump in iPhone sales.
“The China numbers were probably the most important numbers we saw in the overall results,” said Angelo Zino, a stock analyst at S&P Capital IQ. “Consumers in China love the larger phones.”
Apple sold about 192,000 more iPhones each day from January through March of this year compared with a year earlier, resulting in $40.3 billion in revenue.
The 61.2 million iPhones sold was down about 18% from a record winter-holidays quarter, when Apple posted a profit of $18 billion, the highest ever recorded by a public company.
The second-quarter results were also boosted by the iPhone's average selling price of $659, up $62 from a year earlier as consumers store more apps and content on their phones.
The booming sales — overall revenue came in at $58 billion for the quarter — have left Apple with nearly $194 billion in cash.
About $112 billion has been returned to shareholders over the last three years, mostly in the form of stock buybacks and some dividends.
Apple said it would raise its dividend 11% and expand its stock repurchase program by $50 billion. Apple executives described the moves, which should put an additional $88 billion in the hands of shareholders through 2017, as a reflection of their confidence in their pipeline of products and services.
Zino, the analyst, called the $88 billion a “phenomenal number ... exceeding everyone's expectations.”
Whether it's the smartphones, laptops or tablet computers, Apple is beating industrywide averages for growth, Chief Executive Tim Cook told analysts on a call Monday.
“It's tough to find something in the numbers not to like,” he said.
For instance, in China, where the research firm IDC estimated that sales of personal computers fell 5% to start the year, the number of Mac desktops and laptops sold jumped 31%.
“Once again, bucking the tide,” Cook said.
Apple sales in Asian and Pacific nations except Japan soared about 66% compared with a year earlier to more than $21 billion.
Revenue from Apple's App Store doubled in China compared with a year earlier. (Worldwide, it grew 29%.)
Cook said the company has paid about $5 billion to app developers in China since it expanded there, with more than half that sum being doled out in the last year.
Even the iPad, which saw worldwide revenue drop 29% over the last year, had its best quarter ever in China.
“Really and truly, everything you look at in China was extremely good,” Cook said, adding that the company opened six stores in the region during the quarter.
Apple didn't reveal any numbers about its newest product, Apple Watch. Customers started receiving the smartwatch last week, after the close of Apple's last quarter.
Cook said only that he's “thrilled” with the positive reception to the device, which comes in three varieties, ranging from $349 to more than $17,000.
“It's hard to imagine it being better,” Cook said of Apple Watch sales, which aren't expected to be broken out in future earnings reports.
Cook also said that there's “a lot of traction” with HBO Now, the streaming video subscription service that launched exclusively on Apple devices this month.
“I think we're in the early stages of major changes in media ... and I think Apple can be a part of that,” Cook said.
Apple's earnings came in at $2.33 a share, topping the $2.16 forecast of analysts polled by Bloomberg. Apple's market cap has grown about 13% over the last three months to about $772 billion. Apple shares rose $2.37, or 1.8%, to $132.65 in regular trading Monday. They were up 1% after hours.
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