Apple’s second quarter earnings report is in, and the iPhone maker has once again achieved major success.
Apple raked in over $10 billion in profits this quarter, with the lion’s share coming from iPhone sales. The company exceeded expectations on iPhone sales, but missed the mark on a few areas, namely in iPad and iPod sales.
The iPod portion of its revenue has been steadily declining thanks to the ascent of the smartphone as a media device. Apple sold 5,633 iPods this time last year, but only 2,761 this year, indicating a 51% drop in units.
iPads also saw a drop in sales, though it wasn’t as staggering. Year over year, Apple sold 3127 fewer units–a 16% decrease. Tim Cook wasn’t worried, however, as he said the iPad–accounting for 91% of all tablets in the enterprise–would be in greater demand thanks to Microsoft’s release of Office for iPad.
Apple’s seven-for-one stock split occurred yesterday as well, essentially dividing Apple’s shares by six, giving smaller investors the opportunity to buy in at lower share prices. This is not the first time Apple’s split stocks. Apple has made stock splits on May 15, 1987, on June 21, 2000 and also on February 18, 2005.
Apple provided its own example of the stock split: “Let’s assume that as of the Record Date (June 2, 2014) an investor owns 100 shares of Apple common stock and that the market price of Apple stock is $490 per share, so that the investment in Apple is worth $49,000. Let’s also assume that Apple’s stock price doesn’t move up or down between the Record Date and the time the split actually takes place. Immediately after the split, the investor would own 700 shares of Apple stock, but the market price would be $70 per share instead of $490 per share. The investor’s total investment value in Apple would remain the same at $49,000 until the stock price moves up or down.”
The split could potentially allow Apple to enter the Dow Jones Industrial Average, according to Vox. The company was previously barred from it based on the DJIA’s traditional stock calculations.