Apple Does It Again: Another Blockbuster Quarter

Propelled yet again by better-than-expected iPhone sales, Apple handily beat Wall Street estimates for its second fiscal quarter ended March 28.

Apple reported a 33 percent increase in net income, to $13.6 billion, on a 27 percent increase in sales, to $58 billion, for the quarter. That compared with net income of $10.2 billion on sales of $45.6 billion in the year-ago quarter.

iPhone sales of 61.7 million were a record for the second fiscal quarter, 10 percent greater than analyst estimates of 56 million.

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"We continue to see a higher rate of switchers than we have seen in previous cycles, and we are extremely excited about that," said Apple CEO Tim Cook in a conference call with Wall Street analysts. "We are also continuing to see … first-time buyers, particularly in some of the emerging markets."

The record second fiscal quarter results come after Apple posted the biggest profit in corporate history -- $18 billion -- for its first fiscal quarter, with a record 74.5 million iPhones sold in that period.

The earnings per diluted share of $2.33 were well above the Wall Street consensus of $2.16, according to Thomson Reuters. Sales for the quarter of $58 billion were 3 percent higher than the Wall Street consensus of $56.08 billion, according to Thomson Reuters.

Apple shares were up $2.01, or 2 percent, to $134.66 in after-hours trading.

Apple, which has $194 billion in cash, also said its board of directors authorized an increase of more than 50 percent to a program to return capital to shareholders. That brings the total cash Apple plans to return to shareholders to $200 billion by the end of March 2017.

Apple additionally increased its share repurchase program authorization by 55 percent, to $140 billion, up from $90 billion last year.

Sales of the iPhone 6 and iPhone 6 Plus, which were released in September, continued to push the Cupertino, Calif.-based company's success, as 61.2 million devices were sold in the last quarter.

Apple's two newest phone versions flaunted innovative features such as larger screens, putting the devices on the same level as Samsung's smartphone devices, as well as other additions like Touch ID.

Jerry Zigmont, owner of MacWorks, an Apple consultant based in Madison, Conn., has seen mobile and Mac sales accelerating over the past quarter because of Apple's commitment to constantly pushing out these new features.

"What will drive sales globally will always be the phone, and Apple has been good every year about building new features into its new phones," said Zigmont, whose company straps on services and solutions to Apple devices. "We help SMBs as they continue to integrate Apple's technology, and what we're seeing is a steady upward trends for Apple adoption. People are switching to the Mac and letting go of legacy machines as they consider Apple."

The switch-over rate peaks Apple's competition with smartphone company Samsung, which went head to head in the smartphone market where Samsung has long reigned. In the fourth quarter of 2014, market research firm IDC reported that Apple's 74.5 million global smartphone shipments had almost caught up to Samsung's 75.1 million shipments.

Meanwhile, Mac sales grew 10 percent, to 4.5 million, from the same quarter of 2014, while sales for iPads, at 12.6 million, slumped 23 percent year over year in the ninth quarter of decline for the tablet.

PUBLISHED APRIL 27, 2015