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Apple announces biggest share buy-back in corporate history

Jonathan Shapiro (via AFR) | April 24, 2013
Despite mounting concerns over its ability to continue to dazzle the world with its products, Apple on Tuesday posted solid quarterly revenue of $US43.6 billion and quarterly net profit of $US9.5 billion, or $US10.09 per diluted share. That beat analyst estimates, who had predicted profits of $US9.98 a share.

IPHONE LAUNCH MAY BE LATER THAN EXPECTED

Despite a lift in after-hours trading, Apple's share price fell sharply during the earnings call to below $US 406 - negative for the session. CEO Tim Cook told analysts there were some exciting developments in the northern autumn of 2014, but traders had hoped there would be an iPhone launch as soon as July this year.

"We are pleased to report record March-quarter revenue thanks to continued strong performance of iPhone and iPad," said Mr Cook. "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."

He dismissed suggestions that Apple would produce a phone with a larger screen and said that competitors had made "trade-offs" to produce larger screens.

Apple said its results compare to revenue of $US39.2 billion and net profit of $US11.6 billion, or $US12.30 per diluted share, in the year-ago quarter.

"Our cash generation remains very strong, with $US12.5 billion in cash flow from operations during the quarter and an ending cash balance of $US145 billion," said Peter Oppenheimer, Apple's CFO.

Additionally, Apple's board approved a hefty quarterly-dividend bump, declaring "a dividend of $US3.05 per common share, payable on May 16, 2013, to shareholders of record as of the close of business on May 13, 2013."

According to Bloomberg, 14 analysts cut their estimates for Apple in the past four weeks, as shares in the world's most valuable technology company continued their slide from a September record high. In recent months, the bears have moved in aggressively, pushing Apple's stock down last week to a new 52-week low of $US385.10, far below a high of $US705.07 in September.

Apple's surged above $US700 in 2012 before falling below $US400 as competition grows. Photo: Nasdaq

In a note to investors shortly before the earnings announcement, analyst Tony Sacconaghi with Bernstein Research said he was lowering his estimates even further, from $US42.4 billion to $US41.1 billion, in part because of worries that Apple would announce sales of fewer iPhones than many had expected.

"We forecast iPhone unit sales of 34.2 million, versus our previous estimate of 35.2 million," he wrote.

Apple beat the estimate big-time. The company sold 37.4 million iPhones in the quarter, compared to 35.1 million in the year-ago quarter. It also sold 19.5 million iPads during the quarter, compared to 11.8 million in the year-ago quarter.

Despite the share-price fall, analysts have been largely bullish as they keep an eye on anticipated product launches that may give Apple the boost it needs.

 

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