Apple has reported slightly better than expected results ahead of its earnings call, but sales of iPhones and iPads are losing their dramatic growth of recent years, as the company reports its first drop in profit in a decade. 

Apple Isn't the Only Fruit

Apple has posted its financial results for the second quarter, running to the end of March. The iOS company posted quarterly revenue of $43.6 billion and quarterly net profit of $9.5 billion, with Apple's cash stocks now up to $145 billion, but this will do little to quash concern over the company's much discussed direction

These results compare to its Q2 in 2012 that saw revenue of $39.2 billion and net profit of $11.6 billion, so revenue is up but profits are down. Gross margin was also down at 37.5% compared to 47.4% while international sales accounted for 66% of the quarter’s revenue, showing Apple's strategy of focusing on emerging markets is working.

The Company sold 37.4 million iPhones in the quarter, compared to 35.1 million in the year-ago quarter. Apple also sold 19.5 million iPads during the quarter, compared to 11.8 million in the year-ago quarter. We'll have to wait for the earnings call to see what, if any, breakdown Apple provides. It also managed to sell just under four million Macs for flat sales. 

Apple is providing the following guidance for its fiscal 2013 third quarter, revenue between $33.5 billion and $35.5 billion, gross margin between 36 percent and 37 percent. Which doesn't sound like any new blockbuster products will be hitting the market during that time. 

On the Call

We'll provide quotes and comments on the earnings call which is just starting. 

Tim Cook's first comments were about concern over the stock price with news of further share buybacks (up to $60 billion) and a rise in the dividend by 15% to $3.05 a share. 

Learning Opportunities

Unsurprisingly there was no allusion to products, beyond this don't-get-your-hopes-up comment of "Our teams are hard at work on some amazing new hardware, software and services. We can't wait to introduce this fall and throughout 2014."

iPad mini sales were well above the previous quarter, with production issues solved and most sales going to first-time Apple customers. iTunes revenue was up 28% year on year according to Peter Oppenheimer with over 45 billion app downloads. 

Apple retail stores generated $5.2 billion this quarter, up 19%. There are now 402 stores around the world, with another 30 coming during the remainder this year.

While the market as a whole dropped 30% over the last quarter from Christmas according to IDC, Apple has only dropped by around 15%, outperforming the market. Apple noted that its growth rate is not the only measure of its success, but customer satisfaction and loyalty are also important to the company. 

Apple's stock price rose around 4.5% on the news, now drifting down to be up 2%, so perhaps not the end of the world as we know it. However, future revenue is looking down to flat with $35 billion in revenue predicted in the slow third-quarter.