Sales of Apple Inc’s iPhone rebounded last quarter, helping the world’s most valuable company top earnings estimates and weather an industry-wide downturn that has battered much of its product lineup.
Apple said on Thursday that overall revenue was US$94.8 billion in the fiscal second quarter, exceeding the US$92.6 billion analysts predicted.
Sales fell 2.5 percent in the period, but the company had told investors to expect a drop of about twice that.
Photo: REUTERS
The results suggest that Apple is beginning to recover from a slump that has plagued the computer and smartphone industries.
It is a particular relief for investors after Qualcomm Inc, a key supplier, this week raised fresh concerns about smartphone demand.
Apple’s sales in China — a weak spot for other tech companies — also came in a bit better than expected.
As expected, Apple announced plans for US$90 billion in stock repurchases — the same as last year’s plan. The company also raised its quarterly dividend 4 percent to US$0.24 per share.
Although the performance was better than expected, it marked two straight quarters of sales declines — a first for Apple since the COVID-19 pandemic began.
Earnings per share were unchanged from a year earlier at US$1.52, compared with an average estimate of US$1.43 per share.
On a conference call with analysts, Apple said that revenue in the current period would drop by a similar amount as in the past quarter, which ended April 1. That suggests a dip of about 3 percent.
The company also said it would continue to see a negative impact from foreign exchange rates.
Apple generated US$51.3 billion in sales from iPhones — its flagship product — in the second quarter, topping analyst predictions of US$49 billion. That was just a 1.5 percent rise from a year earlier, but marked a record performance for a fiscal second quarter.
Apple CEO Tim Cook said that the increase came “despite the challenging macroeconomic environment.”
Like many tech CEOs delivering earnings reports, Cook also discussed artificial intelligence.
He said it had enormous potential and that Apple would continue weaving it into products in a “very thoughtful” way.
From a supply perspective, the second quarter was an opportunity for the iPhone 14 to rebound. The device had suffered from constraints during the previous period due to COVID-19 restrictions in China.
Meanwhile, iPad revenue fell 13 percent to US$6.67 billion, about in line with estimates of US$6.7 billion. New models, which included a revamped entry-level version and Pro models with M2 chips, did not do much to spur purchases in the quarter.
Likewise, revenue in the Mac division dropped 31 percent to US$7.17 billion, trailing forecasts of US$7.7 billion.
Research firms had said it would likely be a bleak quarter for the lineup, with IDC estimating that Mac shipments fell about 40 percent in the quarter.
Apple had updated the MacBook Pro and Mac mini, adding faster processors, but they failed to reignite the unit’s sales.
Revenue in the home, wearables and accessories division, which includes AirPods, the Apple Watch and the TV set-top box, fell less than 1 percent to US$8.76 billion, beating estimates of US$8.5 billion.
The services business, which includes iCloud, Apple Music, the App Store and the TV+ streaming service, brought in US$20.91 billion, missing estimates of US$21.1 billion. Still, it was a 5.5 percent gain from a year earlier. Last quarter, Apple promised that services revenue — alongside the iPhone — would accelerate.
The company did particularly well in emerging markets, Cook said, pointing to record quarterly sales in Mexico, Indonesia, the Philippines, Saudi Arabia, Turkey and the United Arab Emirates.
The company’s overall sales would have been up if you held currencies constant, he said.
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