Apple reported their second quarter 2014 earnings report on Wednesday that beat analysts’ expectations led by stronger than expected iPhone sales along with international sales which accounted for 66 percent of the quarter’s revenue.
Apple posted quarterly revenue of $45.6 billion and quarterly net profit of $10.2 billion, or $11.62 per diluted share versus revenue of $43.6 billion and net profit of $9.5 billion, or $10.09 per diluted share, in the same quarter a year ago.
Gross margin was 39.3 percent and well above guidance for the quarter.
“We’re very proud of our quarterly results, especially our strong iPhone sales and record revenue from services,” said Tim Cook, Apple’s CEO during the conference call.
“We’re eagerly looking forward to introducing more new products and services that only Apple could bring to market” Cook added.
Apple will hold their annual Developer’s Conference on June 2nd-6th in San Francisco where the tech company is expected to introduce new products and software.
Apple’s quarterly iPhone sales generate the highest level of profits for the company and were 17 percent higher than expected in the 2nd quarter with 43.719 units, easily beating analysts’ estimates of 38.2 units.
iPhone sales were strong in China after securing a deal in January with China Mobile, the world’s largest mobile provider.
On the other spectrum, Apple’s iPad sales were 16 percent lower than expected with 16.35 million units.
CEO Cook blamed the disappointing iPad results on channel inventory.
Cook said that Apple plans to triple the number of retail stores in China during the next year.
For the quarter, Mac sales were up 5 percent with 4.136 million units sold while iPods sales were 51 percent lower with 2.761 million units sold.
iTunes software and services sales were up 11 percent with $ 4.573 billion.
Apple announced plans for a 7:1 stock split in June and reported a dividend of $3.29 per common share.
Apple will also increase its share repurchase authorization to $90 billion.
For the next quarter ahead (3rd quarter), Apple is forecasting revenue between $36 billion and $38 billion and gross margin between 37 percent and 38 percent.