Apple Reports 18% Decline in Global Profit

Apple, Inc. registered a Q2 2013 net income of $9.5 billion, a decline of 18 percent from last year’s $11.6 billion. Revenue, on the other hand, increased from previous year’s $39.2 billion to $43.6 billion this year. Wall Street analysts had projected $9.5 billion in profit and $42.3 billion in revenue.

This is the company’s first profit decline in 10 years. Its first was toward the beginning of 2003, when Apple was stricken by a restructuring charge and the economic slump.

In spite of the reported losses, Apple’s board has raised the quarterly dividend by 15 percent or $3.05 per common share, which is payable on May 16, 2013.

“Our cash generation remains very strong, with $12.5 billion in cash flow from operations during the quarter and an ending cash balance of $145 billion,” said Peter Oppenheimer, CFO at Apple, in a prepared statement.

During the fiscal second quarter, Apple has sold 19.5 million iPads and 37.4 million iPhones, flying in the face of Wall Street’s prediction of 34 million iPhones. iPhone sales were up by 88 percent, while iPad sales soared by 151 percent compared to last year’s figures.

“We are pleased to report record March quarter revenue thanks to continued strong performance of iPhone and iPad,” said Apple CEO Tim Cook, in a prepared 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.”

Fiscal second quarter sales for other products include 5.6 million iPods and just under 4 million Macs, compared to 4 million units a year ago. Apple’s Q2 2013 gross margin is 37.5 percent against year-ago quarter’s 47.4 percent. 66 percent of the quarter’s revenue is attributed to international sales.

Meanwhile, Apple is increasingly faced by competition from Samsung and from a surprising source: Apple users who are not giving up their older-model iPhones and are thus not buying new Apple devices. (KOM) Link. Link. Link. Link.