Apple Fattens Shareholder Wallets as Profit Dips to $9.5 Billion
The pessimistic investor will point out that profits are down $2.1 billion compared to this time last year, though if you prefer to view the glass as half full (or overflowing, as the case may be), Apple continues to make a killing. And to keep shareholders happy, Apple's Board of Directors authorized a "significant increase" to Apple's program to return capital to investors. By the end of 2015, Apple expects to divvy up a total of $100 billion in cash under the expanded program, or $55 billion more than originally planned.
"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."
The decision by the Board to increase dividend payments could be viewed as a sign of faith in Cook to keep the good times rolling. It was rumored earlier this week that the Board had grown discontent with Cook's performance since taking over for Steve Jobs, and that a search for a replacement was secretly afoot. It seemed a silly notion at the time, considering Apple's performance over the past year, and even more so after sifting through the latest financial report.
While Samsung remains Apple's biggest threat in the mobile space, the company said it sold 37.4 million iPhones and 19.5 million iPads last quarter, up from 35.1 million and 11.8 million, respectively, from a year ago. Mac sales were flat at 4 million, perhaps reflective of increased consumer interest in mobile devices.
Apple's stock is up around $16 per share since the start of Monday, adding about $15 billion in stock market capitalization.