Apple is out with Q2 results which are hardly inspiring. Revenue and sales beat, but margins missed and guidance is weak:
- The good news: Q2 Revenue: $43.6 billion, Exp. $42.3 billion
- Q2 EPS: $10.09, Exp $9.98
- And the not so good news: Q2 margin weaker than expected 37.5%, Exp. 38.5%
- And Q3 revenue seen at $33.5-$35.5 billion far below the estimate consensus $38.4. Remember: AAPL no longer sandbags the future
For those looking for a special dividend you won't see it, instead will have to be satisfied with a buyback expansion by $50 billion (eventually), and an increase of 15% in the dividend. Ironically, cash cow AAPL just announced it will raise debt (and got rated by various rating agencies) in order to fund its cash outflow. In other words, it is slowly but surely becoming a utility. So much for the near infinite growth projections.
Market reaction... initial kneejerk 6% higher...
More details on the "capital return program [7]":
The Company expects to utilize a total of $100 billion of cash under the expanded program by the end of calendar 2015. This represents a $55 billion increase to the program announced last year and translates to an average rate of $30 billion per year from the time of the first dividend payment in August 2012 through December 2015.
As part of this program, the Board has increased its share repurchase authorization to $60 billion from the $10 billion level announced last year. This is the largest single share repurchase authorization in history and is expected to be executed by the end of calendar 2015. Apple also expects to utilize about $1 billion annually to net-share-settle vesting restricted stock units.
Additionally, the Board has approved a 15% increase in the Company’s quarterly dividend and today has declared a dividend of $3.05 per common share, payable on May 16, 2013 to shareholders of record as of the close of business on May 13, 2013. Apple is among the largest dividend payers in the world, with annual payments of about $11 billion.
In conjunction with the expanded return of capital program, the Company plans to borrow and expects to announce more details about this in the near future.
“We are very fortunate to be in a position to more than double the size of the capital return program we announced last year,” said Tim Cook, Apple’s CEO. “We believe so strongly that repurchasing our shares represents an attractive use of our capital that we have dedicated the vast majority of the increase in our capital return program to share repurchases.”
“We will continue to return capital to shareholders through dividends, share repurchases, and cash used to net-share-settle vesting RSUs,” said Peter Oppenheimer, Apple’s CFO. “We continue to generate cash in excess of our needs to operate the business, invest in our future, and maintain flexibility to take advantage of strategic opportunities.”
Some more details:
- iPhone units sold: 37.4MM, exp. 35.4MM
- iPad units sold 19.5MM, exp. 18.5MM
- Mac units sold under 4MM, Exp 4.1MM
Profit margin: lowest Q2 margin in the last 4 years:
AAPL revenues in perspective:
AAPL's product breakdown:
Geographic distribution of sales:
AAPL's total cash hoarde: $144.7 billion






