Apple beats Q2 estimates as iPhone sales decline 10%

Apple (AAPL) released second-quarter results Thursday that showed sales fell less than expected in the quarter while profits beat estimates, sending shares up about 6% in premarket trading Friday.

Apple’s revenue in Greater China, which includes mainland China, Taiwan, Singapore and Hong Kong, fell 8% year-on-year to $16.37 billion. However, this is better than the $15.87 billion expected by analysts. The major iPhone revenue reached $45.96 billion, up 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. Wall Street expected EPS of $1.50 on revenue of $90.3 billion, according to analyst estimates compiled by Bloomberg.

The company also announced that it was authorizing an additional $110 billion for stock repurchases and increasing its dividend to $0.25 per share.

Apple is facing the combination of a Huawei resurgence and a slowing economy in China, which is reducing its sales. Still, Apple CFO Luca Maestri told Yahoo Finance’s Josh Lipton that the company has seen growth in mainland China.

The company’s shares are down about 10% year to date and 2% over the past 12 months. Shares of big tech rivals like Microsoft (MSFT) and Google (GOOG, GOOGL), meanwhile, are up 30% and 58%, respectively, over the past year.

Mac revenue came in at $7.45 billion versus a forecast of $6.79 billion, while iPad revenue came in at $5.55 billion. Analysts expected $5.91 billion. Wearables, which include AirPods, Apple Watch and Vision Pro, generated $7.91 billion in revenue. Wall Street was looking for $8.28 billion.

But there was one bright spot for Apple in the quarter: Services revenue reached $23.87 billion, up from $20.91 billion last year, an all-time high. Analysts expected $23.28 billion.

Apple is also gearing up for its Worldwide Developers Conference (WWDC) in June, where it would unveil the latest versions of its iOS, macOS, watchOS, iPadOS, and visionOS operating systems. One of the biggest announcements at the show will likely be how Apple will integrate generative AI into its various products.

The company is late to the generative AI party, with Big Tech competitors already rolling out their own product offerings to consumers and businesses. But that doesn’t mean Apple is sitting still. The company has been busy buying up AI companies and building its own large language model to potentially power its AI efforts. And Maestri told Yahoo Finance that the company is making significant investments in generative AI technologies.

Apple is also looking to work with OpenAI, Google and others to bring its AI offerings up to par, according to Bloomberg’s Mark Gurman.

Generative AI still remains a niche product among consumers. Sure, Google and Samsung offer generative AI capabilities on their smartphones, and PC makers are increasingly moving toward so-called AI PCs, but the apps still largely feel like technology demonstrations rather than revolutionary features that will significantly boost sales. Apple has the opportunity to change that.

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Update: This article has been updated to reflect a change in Apple’s revenue estimates in Greater China.

Email Daniel Howley at Follow him on Twitter at @DanielHowley.

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Aimant les mots, Sara Smith a commencé à écrire dès son plus jeune âge. En tant qu'éditeur en chef de son journal scolaire, il met en valeur ses compétences en racontant des récits impactants. Smith a ensuite étudié le journalisme à l'université Columbia, où il est diplômé en tête de sa classe.Après avoir étudié au New York Times, Sara décroche un poste de journaliste de nouvelles. Depuis dix ans, il a couvert des événements majeurs tels que les élections présidentielles et les catastrophes naturelles. Il a été acclamé pour sa capacité à créer des récits captivants qui capturent l'expérience humaine.
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