Business
Apple Surpasses Expectations with Earnings Beat and Stock Buyback Plan
Apple, the renowned consumer electronics giant based in Cupertino, impressively exceeded Wall Street‘s projections for its fiscal second quarter. The company’s earnings report showcased a slight beat as it posted $1.53 per share on revenues of $90.8 billion, slightly surpassing analyst estimates from FactSet. Despite a marginal rise in earnings, Apple saw a 4% decline in sales year-over-year.
The company also announced a 4% increase in its quarterly dividend, now set at 25 cents per share. Furthermore, Apple’s board has given the green light to a substantial $110 billion share repurchase plan.
In the hardware sector, Apple reported a 10% drop in sales, amounting to $66.9 billion, while its services revenue hit a record high of $23.9 billion, marking a 14% increase year over year.
Looking ahead to the June quarter, Chief Financial Officer Luca Maestri anticipates a low single-digit percentage growth in total revenue. Specifically, Maestri highlighted expectations for double-digit growth in iPad sales and services revenue continuing the upward trajectory.
Post-earnings announcement, Apple’s stock surged in after-hours trading, climbing by 6.8% to $184.78. During the regular session, the stock closed at $173.03, marking a 2.2% increase.
Year-to-date performance for Apple’s stock has been less than stellar, facing challenges like sluggish sales in China, a saturated smartphone market, and absence of a robust artificial intelligence strategy.
Notably, Apple’s iPhone revenue saw a 10.5% decline to $45.96 billion, constituting 51% of the total sales in the quarter. On the other hand, Mac sales rose by 4% to $7.45 billion, while iPad sales experienced a 17% dip to $5.56 billion. Additionally, revenue from wearables, home, and accessories fell by 10% to $7.91 billion.
The outlook for Apple remains mixed as it navigates through market challenges, with analysts like JPMorgan‘s Samik Chatterjee expressing optimism and setting a $210 price target, implying nearly 20% upside potential for the tech giant.
