Shares of Apple Inc. (NASDAQ:AAPL) declined after AAPL posted strong second-quarter results after the closing bell Monday. Let’s dig into the details and determine whether Apple is a good buy on the dip.
This was actually the best March quarter in Apple’s history, with iPhone, Mac and App Store sales leading the way. Compared with Q2 2014, AAPL stock’s net sales soared 25% to $58.01 billion. This beat the consensus revenue estimate of $56.06 billion.
Over the same period, net income jumped 33% to $13.6 billion, or $2.33 per share. Analysts were looking for $2.16 earnings per share. So, Apple posted a 7.9% earnings surprise. This is also the fifth quarter in a row that AAPL increased earnings.
Breaking it down, Apple sold 61.2 million iPhones last quarter, a 40% increase over a year ago. Apple also sold 4.56 million Macs, a 10% increase over last year. At the same time, iPad sales fell 23% year over year to 12.6 million units. AAPL investors apparently may have reacted to the iPhone decline.
Regardless of the post-earnings jitters, Apple still has plenty going for it. Looking ahead to the third quarter, AAPL anticipates revenue between $46 billion and $48 billion. This is in line with the Street view of $47.06 billion.
Even better, Apple has increased its shareholder reward program by more than 50% to $200 billion. Apple now plans to repurchase a total of $140 billion of AAPL stock. In addition, the board of directors approved an 11% increase to its quarterly dividend. Shareholders of record on May 11 will be paid 52 cents per share on May 14.
With Apple stock trading at less than 14 times forecasted earnings, AAPL is an excellent buy on the pullback.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
