Apple Inc reported quarterly revenue and profit above Wall Street expectations on Thursday, with iPhone sales rising and wearable tech sales falling less than analysts feared, despite continued slumping prices. consumer electronics market and bleak economic prospects.
Apple said sales for its fiscal second quarter, ended April 1, fell 2.5% to $94.84 billion, better than analyst expectations for a 4.4% decline to $93 billion, according to Refinitiv data. . Earnings were flat at $1.52 a share, versus estimates for a 5.7% drop to $1.43 a share, according to Refinitiv data.
Apple shares were up 2% in after-hours trading.
Apple’s 1.5% revenue increase from the iPhone contrasts with the broader consumer electronics industry, which is grappling with declining sales of smartphones, tablets and personal computers as consumers and businesses who bought electronics during the pandemic reduce spending amid rising interest rates and economic uncertainty.
The company also kept its dividend and share buyback programs roughly in line with its last update a year ago, approving $90 billion in additional buybacks.
Apple Chief Executive Tim Cook told Reuters in an interview on Thursday that the firm set a fiscal second-quarter record for iPhone sales, thanks in part to capturing new users in markets like India, where Cook recently traveled for the opening of the company’s first retail stores in the country.
“We are delighted with our results in emerging markets,” Cook said. “We have set iPhone installed base records in all geographic segments, and have had very strong ‘new’ sales (in) emerging markets, particularly in Brazil, India and Mexico.”
Cook also stated that the problems in the supply chain have disappeared.
“We have not had material shortages during the quarter in any of our products,” he said.
But not all of Apple’s lines of business were immune to the electronics slump, with Mac sales falling sharply while iPad revenue slid. Sales in China also fell 2.9% to $17.8 billion, a slightly larger decline than global revenue.
Other companies in the industry have forecast a rebound in the second half of the year, and Wall Street expects Apple to recover more quickly and show modest year-over-year revenue growth during its fiscal third quarter, which ends in June.
Apple has announced new service business, such as a high-yield savings account, in recent weeks, but investors are still waiting to see the company’s next big hardware product. Bloomberg has reported that the iPhone maker may unveil a mixed reality headset next month when it holds its annual software developers conference.
iPhone sales rose 1.5% to $51.33 billion, versus analyst expectations for a 3.3% decline to $48.9 billion, according to Refinitiv. These results came amid a 13% decline in global smartphone shipments in the first three months of 2023, as research firm Canalys found Apple gained market share from Android rivals.
Mac sales fell more than 30% to $7.17 billion, versus analyst estimates for a 25% decline to $7.8 billion, according to Refinitiv. Apple’s sales were only slightly better than PC unit shipments in the market, which fell 33% in the first calendar quarter, according to Canalys data.
Sales at Apple’s wearable technology business, which includes devices such as AirPods and the Apple Watch, fell less than 1% to $8.76 billion, compared with estimates for a 4.4% decline to $8.4 billion.
Apple’s fastest-growing segment was its services business, which includes products like iCloud and Apple Pay, which grew 5.5% to $20.9 billion, in line with analysts’ expectations. Cook said Apple now has 975 million subscribers to its platform, which includes both Apple services and third-party apps, up from 935 million last quarter and an increase of 150 million from a year ago.
Apple said its board has authorized a dividend of 24 cents per share, in addition to the share buyback. Both dividends are roughly equal to the 23 cents per share and $90 billion increase in share buybacks the company announced a year ago.
