Apple Earnings Better Than Expected – Dividends Increase

May 2, 2018
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Despite the volatility in the stock market this year, the record declines, and a general feeling of investor unease, Apple (NASDAQ: AAPL) has managed to come out above all, with first quarter earnings reports that have surprised Wall Street. Not only did the company exceed analyst expectations, but eligible shareholders will be receiving increased dividends as Apple plans a record payout.

In their Tuesday afternoon earnings report, it announced that they had bought back $22.76 billion worth of shares in their second fiscal quarter (the first quarter of the calendar year).

Apple reported some impressive figures for the quarter, alleviating fears that the company was struggling to generate revenue from decreased smartphone sales. Revenue for the quarter increased by 16% for a total of $61.1 billion. $38 billion of this came from iPhone sales.

Much of Apple’s growth came from increased revenue in China and Japan, two markets where it is aggressively expanding. Growth in these markets alone was around 20%, more than any other geographic market segment. Apple’s software and service division experienced impressive growth of 20%. This growth came largely from subscription services and purchases from the iTunes marketplace.

Great News for Investors

Apple’s success will be a relief to investors, who have had to endure an extended period of volatility in the stock market this year. It in particular has been a strong performer, with the company remaining resilient in the face of huge price fluctuations. Stock prices have increased 15% in the past year, putting Apple among the highest performing investments on Wall Street.

Dividend payouts will also be increased, as it rewards investors and distributes some of the huge cash reserves that will be repatriated from offshore holdings. The company will also benefit from the recently implemented commercial tax cuts. Apple will spend more than $14 million in dividends this year, increasing payouts by 16% for this quarter.

Apple is Still the World’s Most Valuable Company

It remains the world’s most valuable company with a market capitalization of $838.53 billion. Shares are up 3.66% ahead of Wednesday’s trading. All four of the top stock market performers are in the Technology sector, with Alphabet (NASDAQ: GOOG), Microsoft (NASDAQ: MSFT), and Amazon (NASDAQ: AMZN) taking the remaining spots for the world’s most valuable publicly traded companies.

Investors will not be disappointed by the latest news, and it reinforces the fact that there are still winners in the stock market in 2018, despite all of the uncertainty and bad press that has come this year.

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