By
Godfrey Benjamin
March 22nd, 2024
Apple iPhone sales surprised the Street. Despite the smartphone market shrinking by 15%, Apple managed to pull off strong sales numbers for iPhones.
On Thursday, May 4, tech giant Apple Inc (NASDAQ: AAPL) reported earnings for the second-fiscal quarter (Q2 2023) beating Wall Street expectations. The tech giant managed to beat Street estimates with Apple CEO Tim Cook stating that the iPhone sales for the last quarter were “better than we expected”.
However, the company reported a dip in overall sales for the second quarter in a row. During the extended trading hours on Thursday, May 4, the AAPL stock price surged by 2.5%. Apple’s earnings per share stood at $1.52 against the expected $1.43. Also, the company’s revenue stood at $94.84 billion vs the expected $92.96 billion.
However, the company’s net income for the last quarter stood at $24.16 billion against the $25.01 billion in the year-earlier period. Although Apple managed to beat the revenue expectations for its iPhone sales, the revenue coming from Mac and iPad witnessed a decline.
Again, Apple didn’t provide any formal guidance, a practice it has continued since the Covid-19 pandemic and the start of 2020. In a call with analysts, Apple’s chief of finance Luca Maestri stated that the company is expecting an overall revenue decline of 3% in the current quarter. He added:
“We expect our June quarter year-over-year revenue performance to be similar to the March quarter assuming that the macroeconomic outlook does not worsen from what we are projecting today for the current quarter.”
Luca further added that amid the challenging macro environment, Apple’s services business such as digital advertising and mobile gaming has taken a hit.
Apple in Q2 2023: iPhone Leads, Mac and iPad Sales Sluggish
The better-than-expected iPhone sales came to Apple’s rescue in delivering strong revenue numbers. While the broader smartphone industry contracted by 15%, the demand for iPhones remained robust.
In the quarter ending April 1, iPhone revenue jumped by 2% suggesting that issues surrounding the supply chain and shortage of parts have abated. Speaking to CNBC’s Steve Kovach, Apple chief Tim Cook said that “it was quite a good quarter from an iPhone point of view, particularly relative to the market when you look at the market stats”.
On the other hand, Apple’s Mac and iPad businesses didn’t do equally well. The sales of Apple Mac were off by 31% to just over $7.17 billion. Cook explained:
“There’s really two reasons for that. One is the macro situation in general. And the other is where we’re still comparing to the very difficult compare of the M1 MacBook Pro 14 and 16-inch from the year-ago quarter.”
Similarly, the revenue numbers from iPad sales were off by 13% to $6.67 billion. On the other hand, Apple’s Services business which comprises Apple’s App Store, warranties and search licensing, and monthly subscriptions, saw a 5.5% year-over-year increase.
Tim Cook also shared about Apple’s growth in India, where the company recently launched the first Apple store in Mumbai last month. On the expected lines, Apple’s board also authorized $90 billion worth of share repurchases and dividends.