Apple announced fiscal second-quarter earnings, demonstrating resilience in a challenging tech market despite a slight drop in iPhone sales. The tech giant reported a 4% decline in overall revenue, with a significant 10% decrease in iPhone sales compared to last year. To bolster shareholder confidence, Apple authorized an unprecedented $110 billion in share repurchases, marking a 22% increase from last year’s $90 billion buyback plan.
Following the announcement, Apple shares surged by 6% in after-hours trading. The company’s earnings per share stood at $1.53, slightly surpassing analyst expectations. Meanwhile, revenue for the quarter reached $90.75 billion, exceeding LSEG’s consensus estimate of $90.01 billion.
Despite the declining iPhone sales, Apple CEO Tim Cook provided context, pointing out that the company had experienced a boost in iPhone 14 sales in the previous year due to delayed supply caused by COVID-19. Cook stated that without that surge, the iPhone’s revenue would have been stable. “If you remove that $5 billion from last year’s results, we would have grown this quarter on a year-over-year basis,” Cook told CNBC.
Mac sales provided a positive note, with revenue increasing by 4% to $7.45 billion, driven by new MacBook Air models featuring the upgraded M3 chip released in March. However, sales from Apple’s Other Products category, which includes Apple Watch and AirPods, saw a 10% decline, with revenue of $7.9 billion.
Services were a strong point for Apple, with a 14.2% increase in revenue, totaling $23.9 billion. The Services segment encompasses subscription services, warranties, licensing deals, and payments. Apple claims over 1 billion paid subscriptions through its App Store and other related services.
Sales in Greater China, Apple’s third-largest market, experienced an 8% decline, reaching $17.8 billion. However, this figure was notably better than FactSet analysts’ estimate of $15.25 billion, which allayed concerns about Apple’s market share in China amid increasing competition from local brands like Huawei.
Apple’s CEO noted that the company is optimistic about its future in China, indicating that iPhone sales in the region had actually grown during the quarter.
Additionally, Apple announced a dividend of 25 cents per share, a one-cent increase from previous quarters, signaling continued confidence in its financial stability.
Despite the iPhone sales dip and challenges in other product lines like iPad, Apple has several key events on the horizon. The company will reveal new iPads in May, and there are plans to discuss major developments in AI during its annual developer conference in June. Apple’s commitment to innovation is further underscored by its new product category, the Vision Pro virtual reality headset, though its high price tag may limit initial sales.
Overall, Apple’s record-setting buyback signals its confidence in its long-term strategy, despite current fluctuations in the tech market.
