Apple Bests Quarterly Earnings Expectations

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Per-share profit is down from last year amid heightened competition from iPhone rivals.

Apple earned $7.47 per share on $35.3 billion in revenue in its fiscal third quarter, beating the expectations of analysts, the computer giant said Tuesday.

Apple was expected to earn about $7.31 per share on $35.02 billion in revenue. A year ago in the same quarter, Apple earned $9.32 per share on $35.02 billion.

Analysts were expecting Apple's profit to drop mostly due to increased competition in the smartphone industry, notably from Android, which has been surging in popularity lately. Earlier Tuesday, AT&T said it sold a record number of Android units in the most recent quarter.

In its earnings announcement, Apple said it sold 31.2 million iPhones in the quarter, up from 26 million a year ago. Apple sold 14.6 million iPads, down from 17 million in the year-ago quarter, and 3.8 million Mac computers, down from 4 million.

Apple shares, while down over 30 percent in the past nine months, are worth five times as much as they were at the end of 2008. On Tuesday, the stock fell 2 percent to $418.99 a share but surged 5 percent higher after the closing bell.

The company on Tuesday also declared a cash dividend of $3.05 per share payable Aug. 15 to shareholders of record at the close of the business day Aug. 12.

During a conference call with analysts on Tuesday, CFO Peter Oppenheimer said that Apple TV now features streaming access to 60,000 movie titles and 230,000 television episodes. He also said iTunes has sold 390 million movies to date.

"We are especially proud of our record June quarter iPhone sales of over 31 million and the strong growth in revenue from iTunes, software and services," said Apple CEO Tim Cook. "We are really excited about the upcoming releases of iOS 7 and OS X Mavericks, and we are laser-focused and working hard on some amazing new products that we will introduce in the fall and across 2014."

Prior to the release of its earnings, Apple announced Monday that its iTunes store surpassed 1 billion podcast subscribers. Apple has published 8 million podcast episodes at iTunes.