Apple’s iPhone sales rebounded in the most recent quarter, helping the world’s most valuable company top earnings estimates, and weather an industry-wide recession that has hurt much of its product lineup.
Revenue totaled $94.8 billion in the fiscal second quarter, according to a statement released Thursday, exceeding the $92.6 billion expected by analysts. Although sales fell 2.5% in the period, Apple has warned investors to expect a drop of nearly twice that.
The results indicate that Apple is beginning to recover from the slump that has afflicted both the computer and smartphone industries. It’s a particular relief for investors after Qualcomm Inc., a major supplier, was lifted New concerns About ordering on the phone earlier this week. Apple’s sales in China — a weakness for other tech companies — came in slightly better than expected.
As expected, Apple announced plans to buy back shares worth $90 billion — the same plan as last year. The company also raised its quarterly dividend by 4%, to 24 cents a share.
Shares rose 2% in late trade after the report was released. It closed at $165.79, up 28% for the year.
Although it performed better than expected, it posted two consecutive quarters of sales declines — the first for Apple since the pandemic began. Earnings, meanwhile, were unchanged from a year earlier at $1.52 per share. That compared to an average estimate of $1.43 per share.
In a conference call with analysts, Apple said that revenue in the current period will decline by a similar amount as in the previous quarter, which ended on April 1. This indicates a decrease of about 3%. The company also said that it will continue to see a negative impact from foreign exchange rates.
Apple generated $51.3 billion in sales of the iPhone — its flagship product — in the second quarter, beating analysts’ expectations of $49 billion. Chief Executive Officer Tim Cook said that was only up 1.5% from a year ago but a record performance for the March quarter. In the statement, he said the increase came “despite a difficult macroeconomic environment.”
Like many tech CEOs who report earnings, Cook also discussed artificial intelligence. He said it has huge potential and that Apple will continue to weave it into products in a thoughtful way.
From a supply perspective, the second quarter was an opportunity for iPhone 14 to bounce back. The device suffered from limitations during the previous period due to Covid policies in China.
iPad saw revenue drop 13% to $6.67 billion, roughly in line with estimates of $6.7 billion. The new models, which included a new entry-level version and Pro models with the M2 chipset, did little to spur buying in the quarter.
Similarly, revenue in the Mac division fell 31% to $7.17 billion. This followed expectations of $7.7 billion. Research firms have already warned that this was a bleak quarter for the group, with IDC estimating that Mac shipments fell about 40% in the quarter. Apple updated the MacBook Pro and Mac mini, adding faster processors, but failed to reignite unit sales.
The Home Appliances, Wearables & Accessories division, which includes AirPods, Apple Watch and set-top box – fell less than 1% to $8.76 billion. This exceeded estimates of $8.5 billion. The company added a faster processor to the Apple TV during the quarter, and updated the HomePod speaker during the March quarter.
The services business, which includes iCloud, Apple Music, the App Store and the TV+ streaming service, brought in $20.91 billion, missing estimates of $21.1 billion. However, it was a 5.5% gain over the previous year. In the most recent quarter, Apple promised to accelerate — along with the iPhone — services revenue.