Apple rockets 7% on shipments, stock split, buyback news
Cupertino pulls series of fiscal rabbits out of hat, but analysts still await ‘new category’
Apple Inc stock rose 7% yesterday in the wake of a series of reports from the iPhone maker that lifted investors' spirits.
First, the company surpassed all estimates when it announced its quarterly iPhone shipments figure of 43.7m units in Q1, which compared with only 38m predicted by analysts. The resultant spike in revenue was 4.6%, to $45.6bn, which according to a report from Reuters, constituted "a record for any non-holiday quarter".
The jump was attributed strongly to the Greater China territory, which includes Hong Kong and Taiwan. Here, Apple saw a revenue bump of 13% to $9.29bn after signing up carriers NTT Docomo and China Mobile as partners. Another huge contributor was neighbouring Japan, where revenue leapt 26% to $3.96bn.
Also announced yesterday was Apple's decision to sink a further $30bn, between now and the end of 2015, into its share buyback scheme. The move was applauded by maverick billionaire investor Carl Icahn, who had launched a Twitter campaign to get the company to expand the buyback.
"Agree completely with increased buyback and extremely pleased with results. Believe we'll also be happy when we see new products," he tweeted.
According to Reuters, Apple shares, which have hovered between $500 to $550 since the start of the year, yesterday increased their value 7% to $561.51 in after-hours trade alone.
The company also authorised an 8% increase in its quarterly dividend to $3.29 per share and introduced a rare seven-for-one stock split (according to Investopedia, the most common splits are two-for-one, three-for-two and three-for-one). Stock splits are implemented either to increase liquidity or for broader psychological reasons. In Apple's case, the move was designed to broaden the appeal of its stock, which trades at over $500 a share and may dissuade smaller investors.
But some analysts see the present figures as a distraction from the burning question lodged in the minds of Apple's investors: what innovations can the Cupertino company come up with to return to the successes of the first iPhone and iPad?
Apple chief executive Tim Cook, who has pledged "new product categories" in the coming year, was keen to remind analysts on a conference call yesterday that "We didn't ship the first MP3 player, nor the first smartphone, nor the first tablet... It means much more to us to get it right than to be first."