Posted: May 4, 2023 4:42 PM ET
Apple Inc. on Thursday revealed surprise growth in its iPhone business in the first three months of the year, overcoming a shortfall in Mac revenue as the company promised investors billions more in dividends and buybacks of shares.
Apple AAPL shares gained between 1% and 2% in after-hours trading immediately after the earnings release.
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Apple Inc. on Thursday revealed surprise growth in its iPhone business in the first three months of the year, overcoming a shortfall in Mac revenue as the company promised investors billions more in dividends and buybacks of shares.
Apple
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the shares gained between 1% and 2% in after-hours trading immediately after the earnings release.
The company reported second-quarter revenue of $94.8 billion, down from $97.3 billion a year earlier, while analysts had expected $92.9 billion. iPhone category revenue fell from $50.6 billion to $51.3 billion, with analysts polled by FactSet expecting a decline to $48.7 billion.
Apple posted net income of $24.2 billion, or $1.52 per share, compared with $25 billion, or $1.52 per share, in the prior quarter. Analysts were modeling an average of $1.43 per share in earnings, per FactSet.
Apple’s results came amid concerns about the state of consumer electronics spending, given worrying third-party data points and cautious signals from players like Qualcomm Inc.
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and DuPont de Nemours Inc.
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The company saw a sharp decline in revenue in the iPad and Mac categories. iPad sales fell to $6.7 billion from $7.6 billion and matched the FactSet consensus. Mac revenue fell to $7.2 billion from $10.4 billion, while analysts were looking for $7.8 billion.
Apple’s apparel, home and accessories category remained essentially flat, with sales of $8.8 billion. The FactSet consensus called for $8.4 billion. The services segment showed growth, with revenue reaching $20.9 billion, up from $19.8 billion, roughly in line with the FactSet consensus of $21.0 billion.
See also: Qualcomm stock falls as Apple’s backed-up iPhone inventory contributes to weak outlook
Apple also announced Thursday that it was increasing its buyback program by $90 billion while raising its quarterly dividend by 4% to 24 cents per share. That compares to a $90 billion increase in stock buyback authorization and a 5% increase in the dividend a year ago.
The company hasn’t offered traditional guidance since the pandemic began, and it stuck to that practice in Thursday’s post. Executives can offer more qualitative signals on the company’s earnings call that could determine the ultimate direction of Apple’s stock.
“The end result could simply be driven by the (fiscal third quarter) outlook, where investors may be looking for reassurance and visibility on a limited downside despite tough macroeconomics, even if it’s to ensure that the decline in earnings does not deteriorate more than the -5% moderation investors are already expecting,” JPMorgan’s Samik Chatterjee said in a note to clients ahead of the report.