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Market Wrap-up for Apr. 28 - Examining the Core of Apple's Earnings

Shauna O'Brien Apr 28, 2015


Over the last couple months, Apple (AAPL ) has been stealing the spotlight on both Wall Street and Main Street. The $760 billion tech giant saw a record number of iPhone sales when it released the iPhone 6 and iPhone 6 Plus in September, extreme excitement over the newly released iWatch and plenty of investor attention when the company became the first $700 billion company, and then the first $750 billion company.

In addition to all of the big news, Apple also became a member of the Dow Jones Industrial Average in March, creating even more attention from Wall Street. In today’s newsletter, we will overview Apple’s latest earnings release.


The Numbers


  • Apple reported earnings of $13.6 billion, or $2.33 per share, up 33% from $10.2 billion, or $1.66 per share, last year.
  • Revenue increased 27% to $58.01 billion from $45.65 billion last year.
  • On average, analysts expected the company to report earnings of $2.06 per share and $56.06 billion in revenue.
  • Gross margin for the quarter was 40.8%, compared to 39.3% last year.
  • Revenue in the America segment increased 19%, revenue in Europe rose 12%, revenue in China surged 71%, revenue in Japan declined 15% and revenue in the Asia-Pacific region rose 48%.
  • Apple expects to see third quarter revenue between $46 million and $48 billion.
  • The company now has $194 billion in cash.


The Products


  • iPhone – Apple shipped over 60 million iPhones during the quarter at an average selling price of $658.53 (up 40% from last year). Revenue from the iPhone surged 55% from last year. Analysts expected Apple to sell 58 million units.
  • Mac – Apple sold 4.56 million Macbooks, missed analysts’ view of 4.7 million units sold.
  • iPad – Apple sold 12.62 million units of the iPad during the quarter. Analysts expected to see 13.6 million sold.

For additional insight, check out: How Does Apple Stock React to Product Releases?


Dividends and Buybacks


Apple also reported that it has boosted its dividend by 11% from 47 cents to 52 cents quarterly, or $2.08 on an annualized basis. This is the company’s third dividend increase since it began paying a regular dividend in 2012.

Although the company has been raising its dividend on an annual basis, its 1.5% dividend yield has done little to impress income investors, especially considering that the company’s enormous cash load. Still, its important to watch the world’s largest corporation as it continues to absorb market value and grow.

To increase shareholder value further, Apple has increased its buyback authorization to $140 billion from the $90 billion authorization last year.


The Bottom Line


Towards the end of 2012 and into 2013, shares of Apple took a sharp decline, leaving many investors wondering how far the stock had to fall. By mid-2013 shares started to rise, and continued to rise as the company became more and more exciting. The stock is up over 50% in the last 12 months, and is a lot more reachable for retail investors due to its 7-for-1 stock split. The stock is also now part of the Dow 30, an index which many investors have mixed feelings about.

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