Apple today reported quarterly revenue and profit above Wall Street’s expectations, with iPhone sales rising and wearables sales slipping less than analysts had feared despite a continuing slump in the consumer electronics market and a cloudy economic outlook.
Apple’s sales for its second quarter ended April fell 2.5% to $94.84 billion, better than analyst expectations of a 4.4% decline to $93 billion, according to data from Refinitiv. Profit was flat at $1.52 per share, compared with estimates of a 5.7% fall to $1.43 per share.
A 1.5% rise in Apple’s iPhone revenue contrasted with the broader consumer electronics industry, which is grappling with a decline in sales of smartphones, tablets and PCs.
The company also held its dividend and stock buyback programs roughly in line with its last update to them a year ago, approving $90 billion in additional buybacks.
“We are pleased to report an all-time record in Services and a March quarter record for iPhone despite the challenging macroeconomic environment, and to have our installed base of active devices reach an all-time high,” said Tim Cook, Apple’s CEO.
“We continue to invest for the long term and lead with our values, including making major progress toward building carbon neutral products and supply chains by 2030.”
But not all of Apple’s business lines were immune to the electronics slump, with sales of Macs falling sharply while iPad revenue slipped. Sales in China also dropped 2.9% to $17.8 billion, a slightly larger drop than overall revenue.
IPhone sales rose 1.5% to $51.33 billion, compared with analyst expectations of a 3.3% decline to $48.9 billion, according to Refinitiv. Those results occurred against the backdrop of a 13% decline in global smartphone shipments during the first three months of 2023.
Mac sales fell more than 30% to $7.17 billion compared with analyst estimates of a 25% decline to $7.8 billion, according to Refinitiv. Apple’s sales fared only slightly better than PC unit shipments in the market, which fell 33% in the calendar first quarter, according to Canalys data.
Sales in Apple’s wearables business, which includes devices like AirPods and the Apple Watch, fell less than 1% to $8.76 billion, compared with estimates of a 4.4% drop to $8.4 billion.
Apple’s biggest growth segment was its services business, which includes products like iCloud and Apple Pay, which grew 5.5% to $20.9 billion, in line with analyst expectations. Cook said Apple now has 975 million subscribers on its platform, which includes both Apple services and third-party apps, up from 935 million last quarter and an increase of 150 million from a year ago.
Apple said its board of directors authorized a 24 cents-per- share dividend in addition to share repurchases. Both were roughly the same as the 23 cents-per-share dividend and previous $90 billion share repurchase increase the company announced a year ago.
“Our year-over-year business performance improved compared to the December quarter, and we generated strong operating cash flow of $28.6 billion while returning over $23 billion to shareholders during the quarter,” said Luca Maestri, Apple’s CFO.
“Given our confidence in Apple’s future and the value we see in our stock, our Board has authorized an additional $90 billion for share repurchases. We are also raising our quarterly dividend for the eleventh year in a row.”