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Apple Reports Strong Second Quarter, Buoyed by iPhone 6 Sales

More people are switching to iPhones than in other cycles, Tim Cook says.

Apple

Stronger than expected sales of the iPhone 6 and 6 Plus helped Apple beat Wall Street’s projections in its March quarter. These larger-screen smartphones showed tremendous staying power, at a time when rival devices are vying for market share.

The technology giant posted earnings of $13.6 billion, or $2.33 per share, in its second quarter, up nearly 33 percent from the same time last year. Revenue rose to $58 billion, compared with $45.6 billion a year ago. Analysts had estimated per-share earnings of $2.16 on revenue of $56 billion.

Apple also increased its share buyback program to $140 billion from $90 billion last year and boosted the dividend it pays to shareholders by 11 percent to 52 cents a share. The stock rose about 2 percent in after-hours trading.

“We’re seeing a higher rate of people switching to iPhone than we’ve experienced in previous cycles,” Apple Chief Executive Tim Cook said in a prepared statement, calling it the best March quarterly results ever. “We’re off to an exciting start to the June quarter with the launch of Apple Watch.”

Cook said the growth was fueled by record second-quarter sales of iPhones and Macs, and record performance of the App Store. The burgeoning China market also boosted Apple’s quarterly results, as sales in the world’s most populous country climbed to $16.8 billion — up 71 percent from a year ago.

“We set a record in China for revenues,” Cook said during Monday’s earnings call with investors. “We did that in a quarter that included the Chinese New Year, so we had the help of a strong holiday season.”

The iPhone led Apple’s growth in China, with sales up 70 percent compared with the prior year.

Overall, Apple said it shipped 61 million smartphones in the quarter — 40 percent more than the 43.7 million phones shipped in the second quarter of 2014. Analysts expected Apple to ship 58.1 million phones, according to data compiled by Bloomberg.

Smartphones have become the company’s financial cornerstone, contributing 69 percent of its revenue in the March quarter.

Cook pronounced himself “very bullish” on the prospects for the new generation of iPhone, which he said is showing strong international growth and attracting first-time buyers as well as smartphone users who decide to switch to the Apple device.

“It’s tough to find something in the numbers not to like,” Cook said.

Tablet sales continued to decline, with Apple shipping 12.6 million iPads. That’s a 23 percent drop from a year ago, when it shipped nearly 16.4 million tablets. Bernstein Research analyst Toni Sacconaghi noted that Apple continues to cede share in the tablet market, because much of the growth is coming from lower-priced devices.

Cook acknowledged that the larger screen iPhones and Mac are cannibalizing tablet sales. “At some point, it will stabilize,” he said, noting that underlying trends in sales to first-time buyers in the United States and China give him confidence in the business over the long haul.

The Mac continued to post year-over-year gains, with nearly 4.6 million units sold. That’s up from a year ago, when Apple sold 4.1 million.

This article originally appeared on Recode.net.