Not only has Apple (AAPL) released a solid earnings report of the strongest non-holiday quarter ever but the company has also taken actions to give the lately sluggish stock a boost in value. The company has increased its dividend; taken steps to expand its capital return program to over $130 billion by the end of the calendar year 2015 and the Board of Directors announced a seven-for-one stock split.
At the close of business on June 2nd 2014, each Apple shareholder will receive six additional shares for every share held on the record date and trading will begin on a split-adjusted basis beginning June 9th. Since the company’s last stock split nine years ago in February 2005, shares have increased nearly 12-fold. Trading at a more affordable price range can at least in theory fuel demand for Apple shares. Apple CEO Tim Cook explained in the conference call, “we believe our current stock price does not reflect the full value of the company…the size of the share back increases the signal of the Board and the management team’s strong confidence in the future of Apple.” The self-learning algorithm by I Know First recognized the potential in an Apple stock forecast displaying the initial buy signal for the most recent bullish trend on April 15th 2014, making it another quick win returning 9.27%. It has been long over-due for Apple to deliver positive news like this.
Quarterly Performance Analysis
Stronger than expected iPhone sales, which carry higher margins than the iPad or Mac sales, led gross margins to rise from 37.5% last year to 39.3% this year, beating guidance of 37%-38%. Apple posted quarterly revenue of $45.6 billion and quarterly net profit of $10.2 billion, or $11.62 per diluted share. International sales accounted for 66% of the quarter’s revenue. “These strong revenue results combined with our best gross margin percentage since September of 2012 resulted in earnings per share growth of 15%, which is our highest earnings growth rate in the last six quarters,” stated Cook. Approximately half of all iPhone shoppers and 2/3 of iPad buyers were new customers. Apple shipped 43.72 million iPhones, 16.35 million iPads, 2.76 million iPods and 4.136 million Macs, during the quarter. Not only did Apple beat estimates of 37 million iPhones but the company also set a March quarter record. Chart 1 shows global iPhone sales from 3rd quarter 2007 to 2nd quarter 2014…