Apple Earnings Dwarfed by $100 Billion for Dividends and Buybacks by 2015

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Apple Inc. (NASDAQ: AAPL) is out with its second quarter corporate earnings report for fiscal 2013. The consumer electronics giant has been under more than just a bit of pressure due to the market sell-off. In fact, the price of Apple stock was down almost 25% so far in 2013 the day before earnings while the broader stock market indexes of the S&P 500 and the DJIA were up by more than 10%.

Apple is now doubling its capital return program by saying that it plans to return $100 billion to shareholders by 2015. That is an increase in share buybacks up to $60 billion and it has raised its quarterly dividend to $3.05 per share. Be advised that Apple will likely have to tap the capital markets to accommodate this as so much of that cash is kept outside of the United States.

The consumer electronics giant reported earnings of $10.09 EPS on $43.6 billion in revenue. Thomson Reuters had estimates at $10.07 EPS and $42.59 billion in revenue on last look. Whispernumber.com sent us a whisper number of $10.56 EPS for the quarter. The company said that 66% of its business was now outside of the United States and that its gross operating margin was 37.5% compared to 47.4% in the year-ago quarter.

For the coming quarter guidance was put at between $33.5 billion and $35.5 billion in revenue with gross margin between 36 percent and 37 percent. Apple generated $12.5 billion in cash flow from operations during the quarter with an ending cash and cash equivalent balance of $145 billion at the end of the quarter. Here were the individual metrics:

  • Apple iPhone Unit Sales 37.4 million versus 35.1 million a year ago;
  • iPad Unit Sales 19.5 million versus 11.8 million a year ago;
  • Mac Unit Sales 3.95 million versus about 4 million a year ago.
  • and iPod Unit Sales 5.63 million.

Apple’s stock closed up 1.87% at $406.13 and that was just a day after three different analysts said in more words than none that it was time to buy Apple stock. Apple shares were halted going into the corporate earnings news and have traded within a range of $385.10 to $705.07 in the past 52-weeks.

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