Apple Computer, the company that changed the world with its iMac, iPhone, and other technology, announced favorable earnings and important financial changes according to an April 24, 2014 CNN Money news story.
Apple easily beat analysts’ forecasts and Wall Street expectations for the quarter ending March 31, 2014 with earnings per share of $11.62 and quarterly revenues of $45.6 billion. Analysts were looking for $10.18 earnings per share and $43.53 billion in revenue. The positive surprise pushed Apple back into the spotlight and sent shares of the stock soaring in after- hours trading on Wednesday.
The positive earnings and revenue announcements were met with enthusiasm by investors, but it was only the beginning. Apple also announced an increase in its common stock dividend from $3.05 to $3.29 per share and it plans to accelerate its stock buyback program, allocating an additional $30 billion to the cause.
If the above information wasn’t enough to rattle Wall Street, Apple went further by announcing it will split its common stock 7 for 1. Apple’s stock has traded in the $400 to $710 range for quite some time and upper management felt it was time to pull the price back down to more “normal” levels, making it more marketable.
With so much positive news coming from Apple, investors might be ready to back up the pickup truck and start loading up on common shares. But there are still risks associated with Apple. For one, its product lineup has been met with extreme competition from Samsung and others and some feel Apple isn’t being aggressive enough in marketing its products. Then, there is the simple fact that, in spite of its impressive quarterly results and spike in the stock price, the stock is still trading well below its September, 2012 peak.
The future is going to be challenging for Apple, but with this recent quarter now in the books and with investors feeling more optimistic about the company’s future, Apple can enjoy its time back in the spotlight. The light may glow dim, however, as Apple continues to feel pressure to innovate and maintain its position in a hyper- competitive market.