SAN JOSE, Calif. – The iPhone 6 product tsunami is ebbing, iPad sales continue to fall with no upturn in sight and Apple declined to give any new figures or forecasts for Apple Watch sales, although it did note the product has below average profit margins for the company. Despite those facts, the company reported a great quarter.
Apple posted record sales of $58 billion for its second quarter, thanks largely to iPhone 6 sales. It forecasted a drop in sales and profits amid seasonally declining sales for its iPhones and ongoing drops in iPad sales.
Apple reported a 27 percent increase in sales compared to the same quarter last year. Profits were $13.6 billion, despite the fact iPhone and Mac sales dropped nearly 20 percent each from the previous (very strong) quarter and iPad sales plummeted 40 percent. Sales were down sequentially in all geographic areas except China where there were up just four percent.
Given the declines and the lack of any major new products in the next quarter, Apple forecasted revenues will decline to $46-$48 billion in the next quarter. That’s still well ahead of sales of about $37 billion for the June quarter last year.
Apple estimated gross margins in June will fall to about 39 percent, down from 40.8 in the second quarter. Lower than average profits for the Apple Watch was one of a handful of factors for projecting the overall profit decline for the coming quarter.
Injecting some good news into the quarter, Apple announced it would expand its program to buy back stock by $50 billion to a total of $140 billion. Apple will fund the program through a mix of cash and debt in and outside the U.S. It also will increase by 11 percent the stock dividends it will pay starting in May.
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