(Investors.com) â Consumer electronics giant Apple (NASDAQ:Â AAPL) late Wednesday demolished Wall Street’s targets for its fiscal second quarter, led by strong iPhone sales. Apple stock popped in extended trading.
The Cupertino, Calif.-based company earned $1.40 a share on sales of $89.58 billion in the quarter ended March 27. Analysts expected Apple earnings of 99 cents a share on sales of $77.35 billion. On a year-over-year basis, Apple earnings surged 119% while sales rose 54%.
“This quarter reflects both the enduring ways our products have helped our users meet this moment in their own lives, as well as the optimism consumers seem to feel about better days ahead for all of us,” Chief Executive Tim Cook said in a news release.
Apple also announced a huge increase to its stock buyback plan and raised its quarterly dividend. It increased its existing share repurchase program by $90 billion, topping expectations. Plus, it increased its cash dividend by 7% to 22 cents a share.Apple Stock Jumps In Late Trades
In after-hours trading on the stock market today, Apple stock jumped 2.3%, near 136.65. During the regular session Wednesday, Apple stock dipped 0.6% to 133.58.
Apple stock has formed a cup-with-handle base with a buy point of 135.63, according to IBD MarketSmith charts. The handle also is in a three-weeks-tight period.
In the March quarter, iPhone sales soared 66% year over year to $47.94 billion. That product category accounted for 53.5% of total company sales in the period.
Meanwhile, Mac computer sales rose 70% to $9.1 billion and iPad tablet sales increased 79% to $7.8 billion. The work-from-home and school-at-home trends spurred by the Covid-19 pandemic have fueled Mac and iPad sales.
Apple’s services unit saw revenue rise 26.6% to $16.9 billion in the quarter. The company’s Wearables, Home and Accessories unit noted a 24.7% increase in sales to $7.8 billion.
The earnings report comes a week after Apple’s spring product launch event. At the online event, Apple introduced AirTags lost item trackers and new iPad Pro tablets and iMac computers.A ‘Drop The Mic’ Quarter For Apple
Evercore ISI analyst Amit Daryanani said Apple delivered a “blowout” quarter with no signs of slowing down. In a note to clients, he said iPhone sales were “well ahead of expectations.” The analyst consensus estimate for iPhone revenue was $41.3 billion in the period.
Apple’s gross profit margin in the March quarter was 42.5%, vs. expectations for 39.7%.
Daryanani reiterated his outperform rating on Apple stock with a price target of 175.
Wedbush Securities analyst Daniel Ives said Apple’s March-quarter performance confirms that the iPhone 12 series handsets have sparked a “supercycle” of upgrade activity.
Ives called the results a “drop the mic” quarter for Apple.
“We believe this quarter ultimately will be the first step in driving this stock to a $3 trillion market cap over the next year,” Ives said in a note to clients. He maintained his outperform rating on Apple stock with a price target of 175.
â Article originally published by Investor’s Business Daily