Apple reported strong fiscal second-quarter earnings that exceeded estimates and announced an expanded stock buyback program. Despite overall sales falling 4% and iPhone sales declining 10% year over year, Apple’s shares climbed 7% in extended trading. The company’s board authorized a $110 billion share repurchase, the largest buyback in history. Apple’s EPS was $1.53 versus an estimated $1.50, while revenue was $90.75 billion compared to a $90.01 billion estimate.
Apple did not provide formal guidance but CEO Tim Cook indicated that overall sales are expected to grow in the “low single digits” during the June quarter. The company reported net income of $23.64 billion, down 2% from the year-ago quarter. iPhone sales fell nearly 10% to $45.96 billion, while Mac sales were up 4% to $7.45 billion. Other Products revenue declined 10% to $7.9 billion, with Apple attributing the decrease to a tough comparison to last year’s results. Revenue from the Services division rose 14.2% to $23.9 billion.
The company’s Services division was a bright spot, with sales increasing by 14.2% to $23.9 billion, driven by revenue from subscription services, warranties, and licensing deals. Greater China sales declined by 8% to $16.37 billion, which was better than expected. Apple’s third-largest region, the results potentially dampened concerns about market share in the region. It was noted that iPhone sales experienced growth in China during the quarter. Apple has not released a new iPad since 2022, impacting sales in that division; new iPad announcements are expected in May.
Despite the decline in overall sales, Apple’s shares climbed following the report of its fiscal second-quarter earnings. Apple’s board authorized its largest share repurchase to date, further bolstering investor confidence. The company reported earnings per share above estimates, with revenue also exceeding expectations. Services revenue grew significantly during the quarter, driven by subscription services and licensing deals with search engines. Apple’s performance in Greater China was better than anticipated, with signs of iPhone sales growth in the region. Plans for new product announcements were also teased for upcoming launch events.
While iPhone and iPad sales experienced declines during the second quarter, Apple reported strong performance in its Services division. The company’s buyback program and dividend increase were well-received by investors, with shares rising by 7% in after-hours trading. Apple’s financial results are closely monitored by analysts and investors, with the company facing challenges in certain product categories. However, overall market sentiment remains positive following the earnings report, with Apple expected to continue its growth trajectory in the coming quarters.
