Apple Practically Has a License to Print Money

Apple CEO Tim Cook shows off the new iPhone 6 and the Apple Watch during an Apple special event

Justin Sullivan/ Getty Images

We all realize money doesn’t grow on trees, but you wouldn’t know it by looking at Apple (NASDAQ:AAPL). The world’s most valuable company reported its latest round of earnings after Monday’s closing bell and continues to prove it practically has a license to print money for shareholders.

For the three months ended September 27, 2014, Apple posted a net profit of $8.5 billion ($1.42 per share), up from $7.5 billion ($1.18 per share) a year earlier. Revenue increased to $42.1 billion from $37.5 billion over the same period. The results easily topped Wall Street’s estimates. Gross margin came in at 38%, at the high end of Apple’s own guidance of 37% to 38%. Furthermore, Apple’s retail stores generated $5.1 billion, a new September quarter record.

“Our fiscal 2014 was one for the record books, including the biggest iPhone launch ever with iPhone 6 and iPhone 6 Plus,” said Tim Cook, Apple’s CEO, in a press release. “With amazing innovations in our new iPhones, iPads and Macs, as well as iOS 8 and OS X Yosemite, we are heading into the holidays with Apple’s strongest product lineup ever.”

With the help of the new iPhone 6 models, demand for iPhones set a new September quarter record, with revenue growth of 21% year-over-year. Apple is on track to have the new iPhones in more than 115 countries by the end of December.

Screen Shot 2014-10-21 at 9.42.14 AM

Source: Zero Hedge

Even though Apple has the largest shareholder program in history, the company’s cash pile remains impressive. Taking the total of Apple’s cash and cash equivalents, short-term marketable securities, and long-term marketable securities, the company’s cash position grew to $155.2 billion in the September quarter. In comparison, Apple held a total cash position of $146.8 billion a year earlier. As the chart above from Zero Hedge shows, Apple routinely grows its cash pile on a year-over-year basis.

“Our strong results continue to generate significant cash and we’re extremely happy that this has enabled us to make substantial investments in Apple’s future, while retaining — while returning cash to our shareholders,” said Cook, on the earnings conference call. “We had executed aggressively against our share repurchase program, spending $17 billion in the September quarter alone and $45 billion in the last year.” Apple also paid nearly $3 billion in dividends to shareholders in the recent quarter.

Overall, Apple has taken action on over $94 billion of its $130 billion capital return program. Apple has returned $68 billion to shareholders through buybacks, and still has five quarters remaining to the program. However, the tech giant reviews its capital return program on a quarterly basis, and stays committed to returning value to shareholders.

Disclosure: Long AAPL

Follow Eric on Twitter @Mr_Eric_WSCS

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