Apple reported results for its fiscal second quarter ended March 30,2013 and they are not pretty.
The company’s profits for the quarter fell 18% to $9.5 billion ($10.09 a share) from $11.6 billion ($12.30 per share) in the same quarter a year ago.
Apple observers note that this is the company’s first profit drop in over a decade, a period during which it turned into the darling of both consumers and the stock market.
Revenues in the quarter were up 11% to $43.6 billion.
Gross margin fell to 37.5% (47.4% in the year-earlier quarter).
To mollify investors incensed about the 42% fall in Apple’s share price since hitting a high of $702.10 on September 19, 2012, the company announced it’d return $100 billion to shareholders by the end of 2015, mainly through share repurchase and higher dividends.
This represents a $55 billion increase to the company’s previously announced program to return capital to investors.
Apple shareholders have lost $284 billion since September 19 following the the tumble in its share price.
The company ended the second quarter with $145 billion in cash, much of it stashed away in overseas subsidiaries to avoid U.S. taxes.
Reflecting lower consumer interest in its flagship iPhone and increased competition from rival smartphones running the Android software, unit sales of iPhones fell on a sequential basis to 37.4 million.
However, iPhone sales were higher when compared to the 35.1 million units sold a year earlier.
Rival smartphones have larger screens, better cameras, more advanced features and are priced lower than the iPhone 5.
Sales of Apple’s iPad tablet device in the quarter rose 65% to 19.5 million units compared to 11.8 million in the year-ago quarter but were off by 3.36 million units from the preceding quarter.
Mac sales were down 2% in the quarter reflecting overall weakness in the PC industry as consumers flock to mobile devices like tablets and smartphones.
Apple sold just under 4 million Macs compared to 4 million in the year-ago quarter.
For the current quarter, Apple is projecting revenue of $33.5 billion to $35.5 billion with gross margin of 36%-37%.
It’s anyone’s guess if Apple’s cash sops will energize its shares and give the company’s angry investors something to cheer about.