Apple's profits up 33% in second quarter, $200bn returned to investors

Apple posted a 33% increase in quarterly profits in the three months to March 28, as strong iPhone sales and colossal growth in Chinese trade continued to drive momentum from the release of the iPhone 6 in September.

Net income rose to $13.57bn over the quarter, a considerable jump from $10.22bn over the same period last year. Earnings per share climbed more dramatically, to $2.33, from a split-adjusted $1.66, as the company's stock-repurchase program lowered the share count.

We are thrilled by the continued strength of iPhone, Mac and the App Store, which drove our best March quarter results ever.

Revenue was up 27% to $58.01bn from $45.65bn a year earlier, considerably ahead of the tech giant's predictions of $46-48bn, in line with analysts' expectations. In China, revenue soared 71%, overtaking European sales to make it Apple's second largest market.

A gross margin of 40.6%, representing remaining revenue after manufacturing costs, reflects Apple's booming profitability and topped the company's estimations of 38.5-39.5%.

Apple also raised its dividend by 11% and its share-repurchase program by $50bn, to $140bn. In total, Apple pledged to return $200bn to shareholders by March 2017, via buybacks and dividends.

Despite the share repurchases, Apple's cash reserves swelled to $193.5bn from $178 bn at the end of December.

iPhone sales dwarfed those of iPad's, with 61.17m sold over the quarter, an increase of 40% from 2014. Meanwhile, Macs steadily gained market share against PC competitors.

Proving impervious to difficult market conditions for rivals such as Samsung, Apple managed to gain market share while also raising prices for their premium handset by $100, to $749.

Research firm Gartner said that Apple was the world's leading smartphone manufacturer, capturing 20.4% of the global market, compared to Samsung's 19.9%. This marks a considerable turnaround from the fourth quarter of 2013, when Samsung held 30% of the market to Apple's 18%.

The latest numbers do not include sales of the Apple Watch, which became available for pre-order on 10 April and went on sale on 24 April.

“We are thrilled by the continued strength of iPhone, Mac and the App Store, which drove our best March quarter results ever,” said Tim Cook, Apple's chief executive officer. “We’re seeing a higher rate of people switching to iPhone than we’ve experienced in previous cycles, and we’re off to an exciting start to the June quarter with the launch of Apple Watch,” he added.

As of 22:55 shares of Apple were higher by 1.39% to $134.49.