Apple Misses Wall Street Estimates on Earnings, iPhone, Mac, and Raises Dividend

Apple Inc. missed Wall Street consensus estimates with its March quarter results, missing earnings per share by 5 percent, and missing both iPhone and Mac estimates, as well. The company also announced that it was raising its dividend by 10 percent to US$0.57 per share.

Apple did hit its own guidance on revenues, turning in some $50.6 billion in revenue. The company had guided between $50 and $53 billion in revenue. Gross margins were also within guidance at 39.4 percent, compared to guidance between 39 and 39.5 percent.

Apple didn't guide for earnings, though, and Apple's stock price is based not on Apple's guidance—or even performance—but rather on Wall Street's own expectations. In this case, consensus estimates were for earnings per share of $2.00—Apple turned in earnings of $10.5 billion, or EPS of $1.90, making the quarter a miss in the eyes of the people deciding how much $AAPL is worth.

Adding to the vaguely negative narrative were iPhone estimates of 51.5 million units. Apple sold some 51.2 million units instead. This is the first major year-over-year decline of iPhone sales, as well, as Apple sold 61.2 million iPhones last year in the March quarter.

Wall Street expected sales of some 4.6 million Macs, where Apple sold just 4 million. The company sold 4.5 million Macs in the year-ago quarter.

On the plus side, Apple sold 10.2 million iPads during he quarter. That's down from 2015's March quarter results of 12.6 million units, but it beat Wall Street expectations of 9.9 million units.

Perhaps in response to this performance, Apple announced a 10 percent increase in $AAPL dividends to $0.57 per share. The company also boosted its total stock buyback program from $140 billion to $175 billion. This is the quarter when Apple typically announces changes in its program.

The after hours market is not taking the report well, selling off shares of $AAPL at $96.99 per shares, down $7.36 (-7.05 percent). The markets has largely baked in Apple's year-over-year declines, and what will determine $AAPL's share price over the next few sessions is overall reaction to Apple's miss.

*In the interest of full disclosure, the author holds a tiny, almost insignificant share in AAPL stock that was not an influence in the creation of this article.