Apple beats expectations, sells 37.4M iPhones, 19.5M iPads

Apple (NASDAQ:AAPL) said it sold 37.4 million iPhones and 19.5 million iPads in its fiscal 2013 second quarter, which ended March 30, beating analysts' expectations for around 35 million iPhones and 17 million iPads. In the year-ago quarter, Apple sold 35.1 million iPhones and 11.8 million iPads.

Click here for to see how many iPhones and iPads Apple has sold each quarter since 2007.

The company, the world's overall No. 3 handset maker behind Samsung Electronics and Nokia (NYSE:NOK) and second-largest smartphone maker behind Samsung, posted quarterly revenue of $43.6 billion and quarterly net profit of $9.55 billion, or $10.09 per share.

As many analysts had expected, Apple reported its first quarterly profit decline in a decade, as the company had a profit of $11.62 billion in the year-ago quarter. The company's closely watched gross margin fell to 37.5 percent, down from 47.4 percent in the year-ago period.

Financial analysts expected Apple to report second-quarter net income of $9.53 billion and revenue of $42.4 billion, according to AllThingsD. Apple said in January it expected earnings of between $9.23 and $10.23 per share and sales of between $41 billion to $43 billion for the quarter. The company has a history of giving guidance that it usually exceeds by a wide margin, but in this case it fell within its targets.

Apple generated $22.95 billion in revenue in the quarter from its iPhone business alone, and $8.74 billion from its iPad business, figures that were up 3 percent and 40 percent year-over-year, respectively.

Apple's shares have been dumped by investors in recent months, losing more than 43 percent of their value since they peaked last September. Still, the company remains incredibly profitable by any standard and continues to maintain a huge pile of cash and cash equivalents of $12 billion and a total cash balance of $145 billion.

"The decline in Apple's stock price over the last couple of quarters has been very frustrating to all of us," Apple CEO Tim Cook acknowledged on the company's earnings conference call, according to a Seeking Alpha transcript. "But Apple remains very strong and we will continue to do what we do best. We can't control items such as exchange rates and world economies and even certain cost pressures, but the most important objective for Apple will always be creating innovative products and that is directly within our control."

To that end, Cook said "our teams are hard at work on some amazing new hardware, software and services we can't wait to introduce this fall and throughout 2014." He declined to be more specific. The news could indicate that Apple will not release a new iPhone this summer as some had expected.

Cook also said that the company is thinking about the "potential of exciting new product categories," though he did not say when those products might be introduced. Apple is reportedly working on a watch-like device that would have many functions of a smartphone. Additionally, rumors have for years indicated Apple could release its own TV.

Cook and CFO Peter Oppenheimer repeatedly addressed analysts' questions about the company's gross margin. The executives noted that it was largely affected by the company's product mix, which included more iPads and lower-cost iPad minis. Cook said many consumers in emerging markets, especially China, have been buying the two-year-old iPhone 4, which Apple sells at a lower price.

Some analysts have worried that Apple is losing steam and needs to develop cheaper iPhone models to compete in the low-end and prepaid segments of the smartphone market as the market matures. Indeed, earlier this month the Wall Street Journal reported Apple is still working on a cheaper version of the iPhone that could be launched as soon as the second half of this year, and which may use a different casing and different-colored shells. Apple is also expected to ship the next version of its iOS software around midyear, the report said.

Apple generally has focused on selling products that carry a high margin rather than selling cheaper products in a play for more market share.

In other Apple news, Apple said it is boosting its share buyback program by more than $50 billion. The company said it expects to use a total of $100 billion of cash under the expanded program by the end of 2015. "This represents a $55 billion increase to the program announced last year and translates to an average rate of $30 billion per year from the time of the first dividend payment in August 2012 through December 2015," the company said.

For more:
- see this release
- see this WSJ article (sub. req.)
- see this Bloomberg article
- see this AllThingsD article
- see this separate AllThingsD article

Special Report: Wireless in the first quarter of 2013

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