Apple Inc. on Thursday revealed surprise growth in its iPhone business during the first three months of the year, overcoming a shortfall in Mac revenue as the company promised investors billions more in dividends and stock repurchases.
Apple
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shares were up about 2% in after-hours trading midway through the earnings call.
The company reported fiscal second-quarter revenue of $94.8 billion, down from $97.3 billion a year before, while analysts had been expecting $92.9 billion. Revenue for the iPhone category rose to $51.3 billion from $50.6 billion, with analysts surveyed by FactSet expecting a decline to $48.7 billion.
Chief Financial Officer Luca Maestri said on the earnings call that the iPhone growth was driven by “strong performance in emerging markets from South Asia and India to Latin America and the Middle East.”
Apple logged net income of $24.2 billion, or $1.52 a share, compared with $25 billion, or $1.52 a share, in the year-prior quarter. Analysts were modeling $1.43 a share in earnings on average, per FactSet.
Apple’s results arrived amid concern about the state of consumer-electronics spending, given worrisome 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 steep revenue declines in both the iPad and Mac categories. Sales of iPads fell to $6.7 billion from $7.6 billion and matched the FactSet consensus. Mac revenue sank to $7.2 billion from $10.4 billion, while analysts were looking for $7.8 billion.
Apple’s wearables, home and accessories category was essentially flat, with sales of $8.8 billion. The FactSet consensus called for $8.4 billion. The services segment showed growth, with revenue up to $20.9 billion from $19.8 billion roughly in line with the FactSet consensus of $21.0 billion.
Maestri noted that “certain services offerings such as digital advertising and mobile gaming continue to be affected by the current macroeconomic environment,” though advertising, Apple Care and video set revenue records for the March quarter.
See also: Qualcomm stock falls as backed up Apple iPhone inventory contributes to weak outlook
Apple also announced Thursday that it was boosting its buyback program by $90 billion while upping its quarterly dividend by 4% to 24 cents a share. That compares to a $90 billion increase to the share-repurchase authorization and 5% dividend hike a year ago.
While Apple stopped giving traditional guidance at the start of the pandemic, Maestri shared on the call that he expects June-quarter revenue growth to be similar to what was seen in the March quarter on a year-over-year basis, assuming a stable macroeconomic climate.
