Apple Inc. (NASDAQ:AAPL) announced financial results for its fiscal 2017 third quarter ended July 1, 2017 Wednesday. The firm posted strong results and boosted its revenue outlook for the fiscal year. Revenue was up 7 percent year-over-year. The company’s $45.4 billion in revenue on sales of 41 million exceeded market expectations.
The company posted quarterly earnings per share of $1.67, higher than the $1.42 posted in the year-ago quarter. Luca Maestri, Apple’s CFO said, “We reported unit and revenue growth in all our product categories in the June quarter, driving 17 percent growth in earnings per share.”
The company reported that iPad sales grew across all of Apple’s geographic segments. For the first time in three years, iPad sales grew when compared to the year-ago quarter. More than half of iPad sales in China and Japan were to first-time iPad buyers. Sales of the devices were up 32 percent in the U.S. education market versus the year-ago quarter.
International sales accounted for 61 percent of the quarter’s revenue. However, Apple’s sales in China were flat. Apple CEO Tim Cook didn’t sound optimistic about that changing when speaking on the post earnings conference call.
Cook did sound optimistic about the direction Apple is taking. Cook said, “We hosted an incredibly successful Worldwide Developers Conference in June, and we’re very excited about the advances in iOS, macOS, watchOS and tvOS coming this fall.” Cook pointed out that when iOS 11 ships, Apple will immediately become “the world’s biggest augmented reality platform.”
Apple’s forecast for its next fiscal quarter was particularly strong. Apple expects revenue between $49 billion and $52 billion next quarter, up from the $46.9 billion in revenue Apple reported in 2016. Gross margins are expected to drop slightly next quarter, falling to between 37.5 and 38 percent.
The company returned $11.7 billion to investors during the quarter, bringing cumulative capital returns under the program to almost $223 billion. Apple’s board of directors has declared a cash dividend of $0.63 per share of the Company’s common stock. The dividend is payable on August 17, 2017 to shareholders of record as of the close of business on August 14, 2017.
The news helped push Apple stock to a record high Wednesday. Apple surged 4.7 percent to $157.04 at 11 a.m. in New York, the third-biggest gain in the S&P 500.
When he took over as CEO in 2011, Cook received a big stock award that was set to vest in two phases over a decade. A third of those shares are tied to the company’s relative stock performance versus the S&P 500.
If total shareholder return over three years beats at least two-thirds of the companies in the S&P 500, Cook will collect 280,000 shares on Aug. 24. He gets half that amount if Apple falls in the middle third of index members, and none if it is in the bottom third. As of Tuesday’s close, Apple’s stock was close to the border between the middle and top tiers.