Apple profit slips 18%, but investors cheer dividend increase
Apple's cheaper, older devices have been popular with consumers -- but those discounts have pinched the company's profits.
Apple netted $9.5 billion for its fiscal second quarter, down 18% from $11.6 billion in the same period a year ago.
The company managed to beat estimates from Wall Street analysts, but it's part of a troubling trend for Apple. Many customers are opting to buy older iPhones and the cheaper iPad mini -- devices that are less profitable to Apple.
Overall, the company's gross profit margin fell nearly 10 percentage points over the year to 37.5%. That was at the bottom of the company's own prediction range, and it came in well below a consensus estimate of analysts polled by Thomson Reuters.
In addition to the margin concerns, supply chain issues have plagued the latest batch of iPhones and iPads. Apple still managed to sell 37.4 million iPhones last quarter, compared with 35.1 million in the same quarter last year.
IPad sales came in at 19.5 million, compared to 11.8 million a year ago. Mac sales were flat at about 4 million.
In all, Apple's sales were $43.6 billion last quarter, coming in just above Wall Street's estimates. Apple shares jumped 5% in after-hours trading
Apple increased its impressive cash hoard to $144.7 billion, and it plans to hand some of that back to shareholders. In a separate release, Apple announced it will increase its quarterly dividend to $3.05 per share.
That news comes after activist shareholder David Einhorn pressured Apple to stop hoarding its cash and provide more value to stockholders.