Apple shares jump on record buyback, lower than expected sales drop
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More news: Shares in Apple rose 6.3% to US$183.46 ($278.93) in after hours trading in New York, after the iPhone maker unveiled a record share buyback program and its quarterly revenue dropped less than analyst expectations.
CEO Tim Cook said revenue growth would return in the current quarter, suggesting the tech giant may be regaining its footing in the smartphone market, despite stiff competition and regulatory challenges.
Apple sales fall less than expected, shares up
The news: Apple CEO Tim Cook expects the tech giant to return to sales growth in the current quarter after it reported a smaller than expected decline in second quarter revenue.
The numbers: Apple said fiscal second-quarter revenue fell 4% to USD90.8 billion ($138.3 billion), beating the average analyst estimate of USD90.01 billion.
Quarterly earnings per share were USD1.53, above Wall Street estimates of USD1.50 iPhone sales fell 10.5% to USD45.96 billion, compared with analyst expectations of USD46 billion.
Apple shares rose almost 3% in extended trade after the report.
The context: Chief executive Tim Cook expects a return to sales growth in the current quarter as it invests in AI features to be unveiled in the coming months. The iPhone maker expects "to grow low-single digits" in overall revenue. Apple increased its cash dividend by 4% and announced an additional USD110 billion buyback of its stock.
For the March quarter, Apple's revenue decline in China was not as steep as analysts expected, with Greater China sales of USD16.37 billion, down 8.1% but above analyst expectations. Sales in Apple's services segment, which also represents Apple Music and TV offerings, rose to USD23.87 billion, above analyst expectations of USD23.27 billion.
Apple faces a raft of challenges across its business. Smartphone rivals such as Samsung have introduced competing devices aimed at hosting AI chatbots. On the regulatory front, Apple's services business, which contains its lucrative App Store and was one of the few areas of growth in the fiscal second quarter, is under pressure from a new law in Europe while in the US, the Department of Justice in March has accused Apple of monopolising the smartphone market and driving up prices.
