Apple Inc (AAPL) Stock Soars Above $130 After Company Announced Higher Capital Returns, Share Buyback

Apple Inc (AAPL) stock reached an all-time record as the company reports better than expected earnings for the second quarter ending March 2015. Strong iPhone sales, particularly in China, drove Apple’s revenues and profit margins.

Following Apple’s announcement of increasing its capital return program, shares hit a record-high in after-hours trading. Apple said the company’s net income rose 33 percent to $13.6 billion while revenue increased 27 percent to $58 billion. Analysts had expected Apple to earn $2.15 per share on sales of $55.9 billion but the Cupertino-based company surpassed expectations.

Apple revealed in its earnings call that it would boost its stock buyback plan from $90 billion to $140 billion. The company has also increased its capital return program by 50 percent to $200 billion in cash by the end of March 2017. Apple will increase its quarterly dividend to 11 percent.

Apple stock climbed one percent after hours to $134.91, reports USA Today. Apple Inc CEO Tim Cook said on the earnings call that consumer demand for the Apple Watch was exceeding initial supply. However, he expects Apple to offer its new wearable device in more countries by June.

Cook said Apple was happy with the software applications already available for the Apple Watch. “We couldn’t be happier about how things are going,” said Cook about the apps for the watch.

He added that Apple stock buybacks reflect the company’s strong confidence on Apple’s future. Apple said its cash assets had reached a record $193.5 billion and more than $171 billion in offshore locations, reports the New York Times.

Analysts’ expectations for the Apple Watch were more modest compared to Apple’s other products. Toni Sacconaghi, a financial analyst for Sanford C. Bernstein, predicted Apple will sell 7.5 million watches in the second half of the company’s fiscal year. The analyst believes investors will be looking at whether the wearable device will be the next big thing for Apple.

Gartner analyst Van Baker said he believes Apple will continue its winning streak for the rest of the year despite new competition from Samsung’s new flagship, the S6 and S6 Edge. Apple sold 61.1 million iPhones in the second quarter of its fiscal year, 2015, compared to 43.7 million iPhones in the same quarter from the previous year.

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