Apple bows to investors after beating Wall Street

Apple has vowed to double capital returns to shareholders after beating Wall Street expectations during its second quarter results this morning.

Promising to share more of its growing US$145 billion cash pile, company directors authorised a significant return by utilising a total of $100 billion of cash under the expanded program by the end of calendar 2015.

Representing a $55 billion increase to the program announced last year, the proposal translates to an average rate of $30 billion per year from the time of the first dividend payment in August 2012 through December 2015.

“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, CEO, Apple.

“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.”

Despite the move, the Apple management team will continue to review each element of the capital return program on an annual basis however.

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

“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.”

Financials:

The move was sparked by strong financial results, beating Wall Street expectations and investor predictions despite Apple posting its first profit decline in a decade.

Posting quarterly revenue of $43.6 billion, net profit came to $9.5 billion, or $10.09 per diluted share - representing an 18% drop from the same period last year.

“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, CFO, Apple.

iPhone demand continued to grow, with the Cupertino firm shifting 37.4 million devices during the quarter, compared to 35.1 million twelve months previous.

Apple also sold 19.5 million iPads, compared to 11.8 million in the year-ago quarter, while selling 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, CEO, Apple.

“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.”

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