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apple report second quarter earnings It beat Wall Street’s weak expectations, driven by better-than-expected iPhone sales. Apple CEO Tim Cook told CNBC that the quarter was “better than expected.”
However, Apple’s overall sales declined for the second consecutive quarter. Apple’s stock price rose more than 2% in long trading and continued to rise when Apple provided several forecast data points for the current quarter.
Here’s how the company performed against Wall Street expectations according to Refinitiv’s consensus forecasts:
- EPS: $1.52 vs $1.43 expected
- Earnings: $94.84 billion vs. $92.96 billion forecast
- gross profit: 44.3% vs 44.1% expected
Apple reported a net profit of $24.16 billion during the quarter, compared with $25.01 billion last year. Overall earnings are down 3% for him from his $97.28 billion last year.
Here’s how Apple’s individual product lines performed against StreetAccount’s consensus expectations.
- iPhone Earnings: $51.33 billion vs. forecast $48.84 billion
- Mac Earnings: $7.17 billion vs. $7.80 billion forecast
- Earnings on iPad: $6.67 billion vs. $6.69 billion forecast
- Earnings for other products: $8.76 billion vs. $8.43 billion forecast
- Service Revenue: $20.91 billion vs. $20.97 billion forecast
Apple has not provided formal guidance, continuing a practice dating back to 2020 and the start of the Covid-19 pandemic.
Apple’s chief financial officer, Luca Maestri, said Apple expects overall revenue to fall about 3% this quarter, or about the same as this quarter.
IDC estimates that the highlight of Apple’s report was iPhone sales, which grew year over year despite the overall smartphone industry contracting nearly 15% over the same period.
iPhone revenue increased 2% during the quarter. This suggests that problems with parts shortages and his supply chain that have hampered production for the past few years, including his iPhone factory shutdown late last year, have finally abated.
Cook told CNBC’s Steve Kovac that “from an iPhone standpoint, we had a pretty good quarter, especially when compared to market statistics.”
Apple CEO Tim Cook waves to people at the opening of Apple Inc.’s first flagship store in Mumbai, India on April 18, 2023.
Imtiaz Sheikh | Anadolu Agency | Getty Images
Apple’s Mac and iPad business didn’t take off either. The company warned last quarter that both business units would decline, partly due to parts shortages, but they were lower than expected.
Apple’s Mac business fell more than 31% to just over $7.17 billion. But it’s hard to compare to the same time last year, when Apple was benefiting from the end of the pandemic boom in PC sales and the move to proprietary chips that extend laptop battery life.
“There are really two reasons for that,” Cook said. “One is the general macro situation. The other is that we’re still comparing it to the very difficult comparison of the M1 MacBook Pro 14 and 16-inch from the same period last year.”
Revenue from iPad fell nearly 13% to $6.67 billion.
Apple’s services business includes monthly subscriptions, revenue from Apple’s App Store, warranties, and search license revenue from companies such as Google. Apple reports $20.9 billion in service revenue for him, up 5.45% year-on-year, showing that the company’s most profitable business unit continues to grow.
Apple’s wearables division, which includes the Apple Watch and headphones like AirPods, fell 1% during the quarter, beating analysts’ expectations. Last fall, Apple released a more expensive Apple Watch called the Ultra.
Apple’s Greater China business, which includes Taiwan and Hong Kong in addition to the mainland, had sales of $17.81 billion, down from $18.34 billion last year. Analysts had hoped that China’s electronics demand would rise this year as the company emerged from coronavirus-era lockdowns and other restrictions.
Sales declined in most regions Apple monitors, but rose to $8.11 billion in the Asia-Pacific region.
Cook was optimistic about Apple’s prospects in India. Cook traveled to India last month to open an Apple store and meet with politicians.
“In India, the switcher and first-time buyer metrics look very good,” said Cook. Apple uses the term “switcher” to refer to someone buying his iPhone for the first time previously he had an Android device.
As expected, Apple’s board of directors has approved a $90 billion share buyback and dividend. Apple said it paid $23 billion in share buybacks and dividends in the March quarter. Apple also raised its dividend by 4% to his 24 cents per share.
Cook also said Apple isn’t planning layoffs like other big tech companies have started over the past year.
“I view it as a last resort and therefore mass layoffs are not something we are discussing at this time,” Cook said.