Apple (AAPL) released its second-quarter earnings report on Thursday, showing that sales declined less than anticipated, which led to a surge of around 6% in pre-market trading on Friday.
In Greater China, including mainland China, Taiwan, Singapore, and Hong Kong, Apple saw a decrease of 8% in revenue compared to the previous year, amounting to $16.37 billion. However, this figure exceeded analysts’ expectations of $15.87 billion. Despite challenges, iPhone revenue reached $45.96 billion, slightly down from $51.33 billion in the second quarter of last year.
Overall, Apple reported earnings per share (EPS) of $1.53 on revenue of $90.8 billion, surpassing Wall Street’s estimates of $1.50 EPS on revenue of $90.3 billion.
In addition, the company announced an additional $110 billion for share repurchases and increased its dividend to $0.25 per share.
Apple is facing competition from a resurgent Huawei and a slowing Chinese economy, impacting its sales. Nevertheless, Apple’s CFO Luca Maestri mentioned growth in mainland China during an interview with Yahoo Finance’s Josh Lipton.
While Apple’s stock has experienced a 10% decline year-to-date and a 2% drop over the last 12 months, rivals like Microsoft (MSFT) and Google (GOOG, GOOGL) have seen increases of 30% and 58%, respectively, over the last year.
Mac revenue surpassed expectations at $7.45 billion, as did iPad revenue at $5.55 billion. However, Wearables revenue, which includes AirPods and the Apple Watch, fell short of projections at $7.91 billion compared to an anticipated $8.28 billion.
One bright spot for Apple was its Services revenue, reaching $23.87 billion, up from $20.91 billion last year, marking an all-time high. Additionally, the company is preparing for its Worldwide Developers Conference (WWDC) in June, where it is expected to unveil updates for its operating systems, including iOS, macOS, watchOS, iPadOS, and visionOS. Integration of generative AI into its products is anticipated to be a significant announcement at the event.
While Apple may be behind rivals in the generative AI space, the company has been actively investing in AI technologies through acquisitions and internal development, as highlighted by Maestri in an interview with Yahoo Finance.
