Apple CEO Tim Cook with model Christy Turlington at an Apple Watch demonstration Stephen Lam, Getty Images

Apple Announces 33% Profit Jump for First Quarter

The California tech giant attributed its rocketing performance to the sale of more than 61 million iPhones already this year.

Apple reported sharp first-quarter jumps on Monday in profit, up 33% from a year ago to $13.6 billion, and overall revenue, up 27% from last year to $58.01 billion.

A major contributor to this recent round of success for the California tech giant was the expansion of iPhone sales in China. Revenue for “greater China” leapt 71% to $16.8 billion in the quarter, allowing the region to overtake Europe as Apple’s second-largest market. Apple sold a reported 61 million iPhones worldwide in the first three months of the year.

“We are thrilled by the continued strength of iPhone, Mac and the App Store, which drove our best March quarter results ever,” chief executive Tim Cook said. “We’re seeing a higher rate of people switching to iPhone than we’ve experienced in previous cycles, and we’re off to an exciting start to the June quarter with the launch of Apple Watch.”

The results for the second fiscal quarter exclude the new Watch, which began deliveries last week in nine countries, and was also sold at a handful of boutiques in Los Angeles, Paris, London, Berlin and Tokyo.

Apple offered no figures for Apple Watch sales, but Cook said during a conference call that the response has been “overwhelmingly positive.”

“It’s been really great to see the reaction of customers since their watches arrived Friday,” he said.

Apple also said it was adding $50 billion to its share buyback program and will boost its dividend, in an apparent concession to shareholders fearing the company is stockpiling too much cash.

Apple said its board has increased its share repurchase authorization to $140 billion from the $90 billion level announced last year. The buybacks increase value for shareholders by reducing the number of outstanding shares. The board also approved an 11% increase in quarterly dividends to 52 cents per share.

The moves will only modestly impact Apple’s cash reserves, which rose to more than $193 billion in the past quarter.

“We believe Apple has a bright future ahead, and the unprecedented size of our capital return program reflects that strong confidence,” Cook said. “While most of our program will focus on buying back shares, we know that the dividend is very important to many of our investors, so we’re raising it for the third time in less than three years.”

Apple, already the largest publicly-traded company by market value, saw its shares rise in after-market trade by 1.5% to $134.61 after the better-than-expected results, pushing its capitalization to more than $770 billion.

Brian White, an analyst at Cantor Fitzgerald, said the results were positive and suggest Apple is still growing at a healthy pace.

“Given the strength of this iPhone cycle, expanded cash distribution, and entry into the first new product category in five years with Apple Watch, we believe Apple remains early in this transformational cycle,” he said in a note to clients.

Apple’s results come after the hugely successful launch last year of its large-screen iPhones, helping it regain market share lost to rivals like Samsung and others using the Google Android platform.

Apple’s report showed a 40% jump in iPhone sales compared with the same period a year ago, though iPad sales slumped 23% from a year ago to 12.6 million units, with revenues down 29%.

By Sophie Estienne

Copyright Agence France-Presse, 2015

TAGS: The Economy
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