Apple Earnings Surge 33% on iPhone Sales

Apple Inc. is pulling off a feat rarely seen in any industry, much less the cutthroat world of consumer electronics: gaining market share while also commanding higher prices.

Led by the larger-display iPhones it introduced last fall, Apple on Monday said it sold 61.2 million iPhones in the three months ended March 28, up 40% from the year-earlier period. Many of those sales came in emerging markets, including a 72% gain in the number of phones sold in China.

The average selling price of an iPhone during the latest quarter was $659, up more than $60 compared with a year earlier.

The company said its newest phones are luring more customers away from rivals. “We’re seeing a higher rate of switchers than previous iPhone cycles,” Apple Chief Executive Tim Cook said in an interview with The Wall Street Journal.

In the six months since Apple introduced the new iPhones, the company’s revenue increased by more than $29 billion, compared with the year-ago period. That is roughly equal to NikeInc.’s annual revenue in 2014.

Apple said Monday its gross margin, a closely watched measure of profitability reflecting the percentage of revenue that remains after manufacturing costs, was 40.8%, above its estimated range of 38.5% to 39.5%.

Apple boosted its dividend 11% Monday and its share-repurchase program by $50 billion, to $140 billion. In all, Apple pledged to return $200 billion to shareholders through buybacks and dividends by March 2017. It had previously promised to return $130 billion by the end of 2015.

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