Apple Posts First Profit Decline in a Decade

Seth Fiegerman2013-04-23 21:02:10 UTC

Apple beat Wall Street's estimates for revenue and sales of the iPhone and iPad in the March quarter, but the company's profits declined year-over-year for the first time in a decade.

Apple sold 37.4 million iPhones and 19.5 million iPads, surpassing analysts' estimates by about 1 million on both fronts. Those device sales helped Apple bring in $43.6 billion in revenue for the quarter, beating the consensus estimate of $42.6 billion and setting a new record for March quarter revenues.

"We are pleased to report record March quarter revenue thanks to continued strong performance of iPhone and iPad," said Tim Cook, Apple’s CEO, in a statement. "Our teams are hard at work on some amazing new hardware, software, and services and we are very excited about the products in our pipeline."

It wasn't all good news, however. The company's profit per share was $10.09 for the quarter, down from $12.30 in the same quarter a year ago. That marks the first time Apple's profits have declined since 2003. Apple's gross margin for the quarter was 37.5%, down from 47.4% in the year-ago quarter, presumably due to the fact that some products like the iPad Mini are being sold closer to cost.

Shortly after Apple released its earnings report, Apple appeased investors by announcing plans to more than double the amount of money it allots for buybacks and dividends. The company now plans to give back $100 billion to shareholders by the end of 2015. As of the end of the March quarter, Apple's cash pile had ballooned to $145 billion.

Apple's stock collapsed below $400 last week for the first time since 2011 following weak sales results from some of Apple's supply and manufacturing partners. The stock is currently down more than 40% from the intraday trading high of $705 a share that it hit when the iPhone 5 was released.

The stock was halted for the first 20 minutes after the earnings report was released, but is currently up more than 5% in after-hours trading.

Image via Getty, Kimihiro Hoshino/AFP

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