Apple Shares rose 7% in prolonged trading Thursday after the iPhone maker reported Fiscal second quarter results beat estimates and announced an expanded share repurchase program.
Apple announced that its board had approved $110 billion in stock buybacks, a 22% increase from last yr’s approval of $90 billion. According to Birinyi Associates, that is the biggest buyback in history, ahead of Apple’s previous buybacks.
However, overall sales fell 4% year-over-year throughout the quarter and iPhone sales fell 10%, which Apple attributed to a difficult year-over-year comparison.
Here’s how Apple performed in comparison with LSEG consensus estimates within the quarter ended March 30:
- EPS: $1.53 versus estimated $1.50
- revenue: $90.75 billion versus an estimated $90.01 billion
- iPhone sales: $45.96 billion versus estimated $46.00 billion
- Mac sales: $7.5 billion versus an estimated $6.86 billion
- iPad sales: $5.6 billion versus an estimated $5.91 billion
- Sales of other products: $7.9 billion versus an estimated $8.08 billion
- Revenue from services: $23.9 billion versus an estimated $23.27 billion
- Gross margin: 46.6% versus 46.6% estimated
Apple didn’t provide formal guidance, but Apple CEO Tim Cook told CNBC’s Steve Kovach that overall revenue would grow within the “low single digits” within the June quarter.
Apple posted revenue of $81.8 billion within the June quarter last yr and LSEG analysts expected a forecast of $83.23 billion.
On a conference call with analysts, Apple CFO Luca Maestri said the corporate expected double-digit year-over-year percentage growth in iPad sales for the present quarter. Additionally, he said the services division is predicted to proceed to grow at concerning the high rate it achieved within the last two quarters.
Apple reported net income of $23.64 billion, or $1.53 per share, down 2% from $24.16 billion, or $1.52 per share, within the year-ago period.
Cook told CNBC that sales within the fiscal second quarter suffered from a difficult comparison to the identical period last yr, when the corporate reported $5 billion in delayed iPhone 14 sales attributable to delivery issues brought on by Covid-19.
“If you take that $5 billion out of last year’s results, we would have grown year-over-year this quarter,” Cook said. “And so we look at it internally based on the performance of the company.”
Apple CEO Tim Cook waves to journalists after his meeting with Indonesian President Joko Widodo on the Presidential Palace in Jakarta, Indonesia, April 17, 2024.
Willy Kurniawan | Reuters
Apple said iPhone sales fell nearly 10% to $45.96 billion, indicating weak demand for the present generation of smartphones that launched in September. Sales were in step with analysts’ estimates, and Cook said iPhone sales would have been flat without last yr’s increase in sales.
Mac sales rose 4% to $7.45 billion, but are still below the segment’s high point set in 2022. Cook said the sales were driven by the corporate’s latest MacBook Air models, which launched in March with an improved M3 chip.
“Other products,” as Apple reports sales of its Apple Watch and AirPods headphones, fell 10% yr over yr to $7.9 billion.
During the quarter, Apple launched its first latest major product category in years, the Vision Pro virtual reality headset. However, the $3,500 device is predicted to sell in low numbers, especially in comparison with Apple’s core product lines.
“We’re just scratching the surface, so we’re really excited about our opportunity there,” Cook said.
Apple hasn’t released a brand new iPad since 2022, which is weighing on sales. The division’s sales fell 17% to $5.6 billion. Apple is predicted to unveil latest iPads on May 7, which could revive demand for the product line.
Cook said Apple has “big plans to announce” at its iPad product event next week and on the Worldwide Developers Conference in June.
The company’s services business was a vibrant spot within the quarter. Sales rose 14.2% to $23.9 billion. This is how Apple reports revenue from its subscription services, warranties, search engine licensing agreements, and payments. The company has a broad definition of subscribers, including users who subscribe to apps through Apple’s App Store. It counts over 1 billion paid subscriptions.
Sales in Greater China, Apple’s third-largest region, fell 8% to $16.37 billion, well ahead of FactSet analysts’ expectations of $15.25 billion and possibly reflecting fears Investors dispelled that the iPhone maker could have lost market share to local competitors resembling Huawei.
“I feel good about China. I think more about the long term than the next week or so,” Cook said.
Cook told CNBC that iPhone sales in China increased throughout the quarter, which “might come as a surprise to some people.”
In addition to the repurchase authority, Apple announced it will pay a dividend of 25 cents, a rise of 1 cent.
Correction: Cook said Apple has “big plans to announce” at its iPad product event next week and on the Worldwide Developers Conference in June. An earlier version misstated the context of the plans.
