Apple managed to beat modest market expectations in reporting its second-quarter results on Thursday, but the stock was up 6 percent in extended trade on the back of a record, $110 billion share buyback program and a 4 percent hike in quarterly dividend.
The Cupertino-based company posted quarterly revenue of $90.8 billion, down 4 percent year over year, and quarterly earnings per diluted share of $1.53.
Apple’s quarterly revenue fell less than analysts expected, estimated at $90.1 billion by LSEG data, and CEO Tim Cook expected revenue growth to return in the current quarter.
Apple launches Apple Vision Pro in 2024
Apple, which recently lost its position as the most valuable company in the world to Microsoft, has underperformed other Big Tech companies in recent months, falling 10% this year. Its biggest concern is dropping sales in China amidst tough competition from companies like Huawei and Honor, which now have 17 and 17.1 percent market share in the country. It also faces a raft of regulatory issues in various markets, including the US.
Cook said in a statement: “Today Apple is reporting revenue of $90.8 billion for the March quarter, including an all-time revenue record in Services.
“During the quarter, we were thrilled to launch Apple Vision Pro and to show the world the potential that spatial computing unlocks. We’re also looking forward to an exciting product announcement next week and an incredible Worldwide Developers Conference next month.
“As always, we are focused on providing the very best products and services for our customers, and doing so while living up to the core values that drive us.”
iPhone sales in the second quarter fell 10.5 percent to $45.96 billion, slightly lower than expected $46 billion. Cook said that iPhone sales still experienced “growth in some markets, including China”.
Sales in the Services segment, which includes Apple Music and TV, rose to $23.87 billion. Mac sales grew to $7.5 billion, way higher than market expectations. However, wearables segment (Watches and AirPods, headphones) sales fell to $7.91 billion.
Cook allayed fears that the company was falling behind rivals like Microsoft and Google on embracing artificial intelligence (AI) and said it has spent more than $100 billion on AI-related R&D in the past five years.
Cook added: “We continue to feel very bullish about our opportunity in generative AI and we’re making significant investments. We’re looking forward to sharing some very exciting things with our customers at events later this year.”
Announcing the $110 billion share buyback, CFO Luca Maestri added: “Given our confidence in Apple’s future and the value we see in our stock, our Board has authorised an additional $110 billion for share repurchases. We are also raising our quarterly dividend for the 12th year in a row.”
In a conference call, Maestri said Apple expected current-quarter services and iPad revenue to grow by double digits, and gross margins of between 45.5 percent and 46.5 percent for the third quarter.
Apple’s board of directors has declared a cash dividend of $0.25 per share. The increased dividend is payable on 16 May.
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