All-time high services revenue, the performance of new markets led by India, and new quarterly record for iPhone sales helped Apple beat Wall Street expectations and provide optimism about the overall economic conditions.
The tech giant posted quarterly revenue of $94.8 billion, down 3 percent year-on-year but well above the investor expectations of $92.9 billion, and quarterly earnings per diluted share of $1.52, unchanged year-on-year.
Shares of Apple rose more than 2.5% to $169.92 in trading afterhours.
Tim Cook, Apple’s CEO, commented: “We are pleased to report an all-time record in Services and a March quarter record for iPhone despite the challenging macroeconomic environment, and to have our installed base of active devices reach an all-time high.”
Apple announces share buyback program
Apple also announced a share buyback program of an additional $90 billion (replicating what they did last year) and raised its quarterly dividend to 24 cents a share, up from 23 cents a share a year ago.
Luca Maestri, Apple’s CFO, added: “Our year-over-year business performance improved compared to the December quarter, and we generated strong operating cash flow of $28.6 billion while returning over $23 billion to shareholders during the quarter.
“Given our confidence in Apple’s future and the value we see in our stock, our Board has authorised an additional $90 billion for share repurchases. We are also raising our quarterly dividend for the eleventh year in a row.”
The company said iPhone sales were up 1.5 percent to $51.3 billion, besting expectations for a 3.3 percent drop because of inflation and supply chain issues. Research firm Canalys said global smartphone shipments fell 13 percent in the first three months of 2023, but Apple gained market share against Android rivals.
Cook told Reuters that record iPhone sales was, in part, due to picking up new users in markets such as India, where the first Apple store was inaugurated by him last month.
“We were thrilled by our performance in emerging markets,” Cook said. “We set records for the iPhone installed base in every geographic segment, and we had very strong ‘new to’ sales in emerging markets, particularly in Brazil, India and Mexico.”
Apply Services business
Services business, which includes products like iCloud and Apple Pay, grew 5.5 percent to $20.9 billion, but there was a big decline in the sales of Macs and in iPad revenue slipped. Sales in China also dropped 2.9 percent.
Mac sales fell more than 30 percent compared with analyst estimates of a 25% decline. Wearables (AirPods and the Apple Watch) sales fell less than 1 percent compared with estimates for a 4.4 percent drop.
Both Mac and iPad revenues were worse than expected. Mac revenue was $7.17 billion against an expected $7.80 billion, while iPad revenue was down $6.67 billion against an expected $6.69 billion.
No mass layoffs planned
Cook also raised a cheer when he said Apple is not considering any job cuts, unlike what most tech heavyweights have done in recent times.
“I view that as a last resort and, so, mass layoffs is not something that we’re talking about at this moment,” Cook told CNBC.
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