Apple Inc. on Wednesday posted a modest 4.7% increase in sales and a 7% jump in profit its second quarter that nevertheless beat the expectations of Wall Street analysts and helped send the company's stock soaring more than 8% following the financial announcement.
The Cupertino, Calif., technology company reported $10.2 billion in profit on $45.6 billion in revenue in the quarter ending March 29, driven primarily by strong year-over-year iPhone saies. For the same quarter a year earlier, Apple recorded $43.6 billion in sales and $9.5 billion in net income. Analysts polled by Thomson Reuters had expected Apple to post $43.5 billion in revenue.
Apple also announced that it will increase its dividend by about 8% to $3.29 per share, which the company will distribute in May. The company pays out about $11 billion a year in dividends. In addition, Apple said it will increase the total amount of its own stock that it will buy back to $90 billion by 2015. That's up from the $60 billion figure announced last year. It will also initiate a seven-for-one stock split.
Those moves, along with the company's better-than-expected financial results, led investors to push Apple's shares up more than 8% in after-hours trading. The stock had closed down $6.95, or 1.3%, to $524.75 before Apple released its results. After the announcements, its shares surged $42.70 to $567.45 as of 5:40 pm, Eastern.
"We’re very proud of our quarterly results, especially our strong iPhone sales and record revenue from services," said Apple’s CEO, Tim Cook, who told analysts during a conference call to discuss the earnings that his company will continue to actively invest in research and development in order to innovate new technologies.
Since the death of Apple's founder Steve Jobs, Cook and his team have labored to prove to investors and customers that the company had lost none of its mojo. Demand for the iPhone continues to be strong, with Apple having sold 43.7 million of the devices in the second quarter, up 17% over the same quarter last year. Sales of the iPad, however, dropped 16% over the same timeframe to 16.35 million units.
Here's a breakdown of Apple product sales for the second quarter: