Apple shares rose 3.5% in US after hours trading Wednesday morning as it produced better than expected revenue, earnings and confirmed a $US100 billion increase in its buyback. That was after the shares rose 2.3% in normal trading.
The company’s solid March quarter report will go someway to settling frazzled investor nerves about the heath of the mega tech leaders, despite record quarterly reports from Netflix, Facebook, Alphabet (Google and Amazon).
Also helping was an upbeat forecast for the current June quarter.
Apple expects revenues of $US51.5 billion-$US53.5 billion, suggesting growth of around 18% from the June 2017 quarter and better than estimates from the market of $US52 billion.
Apple confirmed market reports earlier in the week of a new $US100 billion share buyback scheme and lifted its dividend by 16%, as it reported a 30% jump in earnings.
Revenues for the three months to March was up a solid 16% year-on-year to $US61.1 billion. The company said revenues rose 20% in emerging markets and reached record levels in Japan, the Americas and Europe.
Net profit jumped 25% to $US13.8 billion.
It said it sold 52.2 million iPhones in the quarter, up 3% from a year ago, settling for the time being, market fears of a big fall in the quarter.
Apple insisted that demand for the expensive iPhone X remained strong in key markets such as the US and China, with the device’s higher price helping to drive a 14% boost to iPhone revenues as some analysts had forecast.
“We’re thrilled to report our best March quarter ever, with strong revenue growth in iPhone, Services and Wearables,” said Tim Cook, Apple’s chief executive in a statement with the earnings release. (Apple said there was a 50% jump in revenues in the quarter for its Watch, Beats and AirPods year-over-year)
“Customers chose iPhone X more than any other iPhone each week in the March quarter, just as they did following its launch in the December quarter. We also grew revenue in all of our geographic segments, with over 20 per cent growth in Greater China and Japan.”
He said Apple would spend $US30 billion in capex in the next five years.
But for all Mr Cook’s talk and the solid earnings side of the report, it’s the $US100 billion boost to the share buyback campaign which will help settle investor concerns and a boost to dividends to a total of $US13 billion a year.
The current buyback campaign will be $US210 billion when it ends in June. The new program doesn’t have a time limit, indicating Apple will use it a bit more sparingly in coming years.
