Apple Inc. (AAPL) Q1 Earnings: Top Ten Surprises

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Apple Inc. (NASDAQ:AAPL) reported its first quarter results yesterday, which prompted an 8.08% decline in its stock. Investors closely watch Apple’s holiday quarter sales because it’s the best quarter for the company. Despite mammoth iPhone and iPad sales figures, investors were disappointed. Let’s look at the ten biggest surprises of the tech giant’s results for the quarter ending December 28.

1) Apple shares plummet after hours

Apple Inc. (NASDAQ:AAPL) shares closed Monday at $550.50, up 0.81% for the day. It signaled investors’ optimism in the company’s earnings. But shares of the Cupertino-based company tanked as much as 8.08% to $506.04, wiping away more than $40 billion from its market cap.

2) Impressive growth in international business

The tech giant’s international business accounted for a whopping 63% of its total revenue for the quarter. The iPhones accounted for 69% of Japan’s total smartphone sales during the quarter. Apple Inc. (NASDAQ:AAPL)’s China business posted a 29% growth. The company said other regions like Russia, the Middle East and Latin America also registered good growth.

3) iPhone sales reach a new high

Apple Inc. (NASDAQ:AAPL) sold a staggering 51 million iPhones during the quarter, compared to 47.8 million units in the same quarter last year. Analysts polled by FactSet expected the iPhone sales of at least 55 million units.

4) iPad sales set a new record

Apple Inc. (NASDAQ:AAPL) also set a new record for iPad sales, selling 26 million tablets during the quarter, compared to 22.9 million a year ago. That includes 750,000 iPads sold to K-12 schools in Texas.

5) Apple announces a cash dividend of $3.05 per share

The tech giant announced a cash dividend of $3.05 a share. The dividend is payable on February 13 to shareholders on record as of February 10. The company generated $22.7 billion in cash flow from operations, and returned $7.7 billion to shareholders through share buybacks and dividends during the quarter. So far, Apple Inc. (NASDAQ:AAPL) has returned $43 billion to shareholders under its capital return program.

6) U.S. market is saturating, at least for Apple

While Apple Inc. (NASDAQ:AAPL)’s total sales jumped 6% to $57.6 billion, revenues from the U.S. market skidded 1% during the quarter. That’s the reason the company is aggressively focusing on emerging markets like China and India to drive its growth.

7) Cash reserves rise

Apple Inc. (NASDAQ:AAPL) CFO Peter Oppenheimer said that the company ended Q1 with $159 billion in cash, compared to $147 billion in the previous three months. And a big chunk of that is stashed outside the U.S. Only $34.4 billion of its cash is in the U.S. while $124.4 billion or 78% was offshore.

8) Net profits unchanged

Apple Inc. (NASDAQ:AAPL)’s profit for the first quarter was $13.07 billion or $14.50 per share. Though it was slightly below analysts’ estimates, the profit was similar to last year’s $13.08 billion.

9) MacBook Air and iMac lead Mac sales

The Tim Cook-led company sold a record 4.8 million Macs during the quarter ended Dec.28, up from 4.1 million units a year ago. Apple Inc. (NASDAQ:AAPL) said that its Mac sales were driven by MacBook Air and iMac, though MacBook Pro was also strong. Meanwhile, iPod sales plummeted 52% compared to the corresponding quarter last year.

10) Apple issues downbeat Q2 forecast

The company’s weak guidance for the current quarter was the main reason behind heavy decline in its stock prices. Especially when Apple Inc. (NASDAQ:AAPL) has started selling iPhones to China Mobile. The company expects Q2 revenues between $42-$44 billion, missing the consensus estimate of $46 billion. It indicates that Apple’s quarterly revenues are going to decline over the previous year for the first time since Q1, 2003.

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