Apple (AAPL) earnings just hit Wall Street, and it’s a massive beat for the tech company after some struggles lately.
But perhaps the biggest news for AAPL stock investors is that in a few weeks, the stock price will be slashed.
Don’t fear, it’s not because AAPL stock is crashing on bad earnings … it’s because of a planned Apple stock split that will create seven shares for every one share investors currently own.
The Apple stock split, scheduled for June 2, will take AAPL down to below $100 a share — a level Apple stock has not enjoyed since the bear-market lows of 2009.
Other earnings details beyond this massive Apple stock split news include:
- AAPL stock buyback plans: Apple’s board authorized another significant increase to the its dividend and buyback plan. The company will now buy back an additional $30 billion of Apple stock, totaling $90 billion.
- Apple dividend increase: Shareholders got an 8% bump to $3.29 per share, up from $3.05 previously.
- Massive Apple earnings beat: Apple posted earnings per share of $11.62 on revenue of $45.6 billion. Apple’s guidance for the quarter was for $42 billion to $44 billion, making this a handy revenue beat. But more impressive was that Wall Street expected EPS of around $10.20 — meaning profits blew the doors off.
- iPhone sales bounce back: Apple sold 43.7 million iPhones during the quarter, beating analyst estimates by about 6 million units. This was a very important number, considering it disappointed big-time on iPhone sales last quarter and AAPL stock sold off about 8% the next trading day despite numbers that were pretty good otherwise.
A lot of pundits will be horse-racing these numbers in the days ahead, but my takeaway is that Apple has proven that it still can make a lot of money and still can top Wall Street’s ambitious expectations for its all important iPhone despite tough competition from Google (GOOG) Android devices.
Long-term, there remain real questions about whether Apple can keep innovating and look beyond the iPhone — which represents more than half of total Apple sales. The tablet market is very much important to the long-term success of AAPL stock, as is whatever the next big consumer tech trends are down the road.
Of course, that’s long-term… in the short-term, expect investors to bid up AAPL stock tomorrow and in anticipation of the 7-for-1 Apple stock split in June.
Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. As of this writing, he did not hold a position in any of the aforementioned securities. Write him at firstname.lastname@example.org or follow him on Twitter via @JeffReevesIP.