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Investing.com – Apple reported Thursday fiscal second-quarter results that topped Wall Street estimates amid better-than-feared performance in its key China market and the tech giant unveiled its largest ever stock buyback.
Apple Inc (NASDAQ:AAPL) rose more than 7% in afterhours trading following the report.
For the quarter ended Mar. 30, the company announced earnings of $1.53 per share on revenue of $90.8 billion. Analysts polled by Investing.com had anticipated EPS of $1.5 on revenue of $90.32B.
In greater China, a key market for the iPhone maker, sales fell 8% to $16.37B, amid rising competition from smartphone rivals in the country. But that was less bad than feared as analysts had forecast revenue in China falling to $15.25B.
iPhone revenue, which makes up about half of total revenue, fell to $45.96B from $51.33B a year earlier, but that just missed estimates of $46B.
The weaker than expected iPhone revenue, and pressured margins “show that the revenue growth plateau is more than a regional problem and should keep on deepening without new, more innovative products,” Investing.com senior analyst Thomas Monteiro said Thursday.
Revenue from Apple’s service business, which includes Apple Music, Apple TV+ and iCloud, grew to $23.87B from $20.91B a year earlier, above estimates of $23.27B.
Wearables and accessories raked in $7.91B in revenue, down from $8.76B, while iPad revenue fell 16.7%, while Mac sales were up 3.9% in Q2 from a year earlier.
The company also announced a $110B stock buyback program and hiked its dividend by 4% to $0.25 a share.
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The largest ever buyback could buy investor support and trust, Monteiro adds, that will be needed in the mid-term for the company to launch new products and solutions that “will shift its behemoth operation back into the sustained growth path.”
The shift for the company to resume its growth path would likely involve “higher and better hardware-to-product AI integration,” Monteiro said. “This is something that has already begun to show some success on a smaller scale on the Mac operation, which did surprisingly well despite the overall woes.”
Looking ahead, Apple CEO Tim Cook told CNBC’s Steve Kovach that sales would “grow low single digits” in the June quarter.
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