Apple Inc shares yesterday jumped in premarket trading after the company posted stronger-than-expected sales last quarter and predicted a return to growth in the current period, sparking optimism that a slowdown is easing.
Although revenue fell 4.3 percent to US$90.8 billion in the first quarter, that was better than the US$90.3 billion predicted by analysts.
Profit also topped Wall Street projections in the period and Apple announced the biggest stock buyback in US history.
Photo: Bloomberg
The results came as a relief to investors, who have been waiting for the iPhone maker to pull out of a long slump.
Apple has posted sales declines in five of the past six quarters, hurt by a sluggish smartphone market and headwinds in China.
The company in February had warned analysts that revenue in the latest period would be down about 5 percent from a year earlier.
In the current period, Apple expects sales to climb by a percentage in the low single digits. The company predicted that its iPad and services business would grow by a rate in the double digits, but declined to give a forecast for the iPhone — its flagship product.
The shares gained 6 percent in premarket trading, on track to add about US$160 billion to its market value if the gains hold at the open in New York.
Apple had been down 10 percent to US$173.03 this year through the close on Thursday.
Earnings per share were US$1.53 in the fiscal second quarter, which ended on March 30.
That exceeded the US$1.50 analysts had estimated.
Apple increased its dividend by 4 percent to US$0.25 per share, in line with expectations.
Its board approved plans to buy back an additional US$110 billion of the company’s stock.
A lack of innovative new devices has contributed to slow sales at Apple, but the company looks to begin rectifying that on Tuesday next week, when it plans to unveil new iPads — the first updates to its tablet line in one-and-a-half years.
The Cupertino, California-based company also is planning a long-awaited push into generative artificial intelligence (AI).
Next month, Apple chief executive officer Tim Cook is expected to lay out Apple’s AI strategy at its annual Worldwide Developers Conference.
“We are making significant investments in the space,” Apple chief financial officer Luca Maestri told Bloomberg Television’s Emily Chang. “We believe we are well-positioned.”
Apple’s slowdown in China has been of particular concern to investors in the past few months.
Counterpoint Research estimated that sales of the iPhone nosedived 19 percent in China during the first three months of the year, the product’s worst quarter since 2020.
Worldwide, shipments of the device fell nearly 10 percent in the quarter, according to IDC, marking the steepest drop since COVID-19 lockdowns snarled supply chains in 2022.
Against that backdrop, Apple’s China results were more upbeat than expected.
The company generated US$16.4 billion in revenue from greater China last quarter, although that number was down from a year earlier.
However, it handily beat the US$15.9 billion analysts had predicted.
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