Apple (AAPL) earnings report Q2 2024

Apple shares climbed 7% in prolonged buying and selling on Thursday after the iPhone maker reported fiscal second-quarter earnings that topped estimates and introduced an expanded inventory buyback program.

Apple introduced that its board had approved $110 billion in share repurchases, a 22% enhance over final yr’s $90 billion authorization. It is the most important buyback in historical past, forward of Apple’s earlier repurchases, in line with information from Birinyi Associates.

Nonetheless, general gross sales fell 4% and iPhone gross sales fell 10% yr over yr in the course of the quarter, which Apple attributed to a troublesome comparability versus final yr.

Here is how Apple did versus LSEG consensus estimates within the quarter ended March 30: 

• EPS: $1.53 vs. $1.50 estimated 
• Income: $90.75 billion vs. $90.01 billion estimated 
• iPhone income: $45.96 billion vs. $46.00 billion estimated 
• Mac income: $7.5 billion vs. $6.86 billion estimated 
• iPad income: $5.6 billion vs. $5.91billion estimated 
• Different Merchandise income: $7.9 billion vs. $8.08 billion estimated 
• Providers income: $23.9 billion vs. $23.27 billion estimated 
• Gross margin: 46.6% vs. 46.6% estimated 

Apple didn’t present formal steering, however Apple CEO Tim Cook dinner informed CNBC’s Steve Kovach that general gross sales would develop within the “low single digits” in the course of the June quarter.  

Apple posted $81.8 billion in income in the course of the year-ago June quarter and LSEG analysts had been in search of a forecast of $83.23 billion.  

On an earnings name with analysts, Apple finance chief Luca Maestri mentioned the corporate anticipated the present quarter will ship double-digit year-over-year share development in iPad gross sales. What’s extra, he mentioned the Providers division is forecast to proceed rising at concerning the present excessive price it is achieved in the course of the previous two quarters.

Apple reported internet revenue of $23.64 billion, or $1.53 per share, down 2% from $24.16 billion, or $1.52 per share, within the year-earlier interval.

Cook dinner informed CNBC that gross sales within the fiscal second quarter suffered from a tough comparability to the year-earlier interval, when the corporate realized $5 billion in delayed iPhone 14 gross sales from Covid-based provide points. 

“Should you take away that $5 billion from final yr’s outcomes, we’d have grown this quarter on a year-over-year foundation,” Cook dinner mentioned. “And in order that’s how we have a look at it internally from how the corporate is performing.” 

Apple mentioned iPhone gross sales fell almost 10% to $45.96 billion, suggesting weak demand for the present era of smartphones, which had been launched in September. The gross sales had been in step with analyst estimates, and Cook dinner mentioned that with out final yr’s elevated gross sales, iPhone income would have been flat.  

Mac gross sales had been up 4% to $7.45 billion, however they’re nonetheless under the section’s high-water mark set in 2022. Cook dinner mentioned gross sales had been pushed by the corporate’s new MacBook Air fashions which had been launched with an upgraded M3 chip in March.  

Different Merchandise, which is how Apple stories gross sales of its Apple Watch and AirPods headphones, was down 10% yr over yr to $7.9 billion. 

Through the quarter, Apple launched its first new main product class in years, the Imaginative and prescient Professional digital actuality headset, however the $3,500 system is anticipated to promote in low portions, particularly in comparison with Apple’s main product traces.  

“We’re solely scratching the floor there so we could not be extra enthusiastic about our alternative there,” Cook dinner mentioned. 

Apple has not launched a brand new iPad since 2022, which is a drag on gross sales. Income for the division fell 17% to $5.6 billion. Apple is anticipated to announce new iPads on May 7 that would revive demand for the product line.  

Cook dinner mentioned that Apple has “huge plans to announce” at its iPad product occasion subsequent week and on the Worldwide Developers Conference in June.  

The corporate’s Providers enterprise was a brilliant spot in the course of the quarter. Gross sales rose 14.2% to $23.9 billion. That is how Apple stories income from its subscription providers, warranties, licensing offers with serps, and funds. The corporate has a broad definition of subscribers, together with customers subscribing to apps by Apple’s App Retailer. It counts over 1 billion paid subscriptions.  

Gross sales in Higher China, Apple’s third largest area, had been off 8% to $16.37 billion in income, which was considerably higher than the $15.25 billion in gross sales anticipated by FactSet analysts, doubtlessly quelling investor worries the iPhone maker could have been shedding market share to native rivals resembling Huawei.  

“I be ok with China. I believe extra about long run than to the following week or so,” Cook dinner mentioned. 

Cook dinner informed CNBC that iPhone gross sales grew in China in the course of the quarter, which “could come as a shock to some individuals.”  

Along with the buyback authorization, Apple mentioned it could pay a 25-cent dividend, a 1-cent enhance.

Correction: Cook dinner mentioned that Apple has “huge plans to announce” at its iPad product occasion subsequent week and on the Worldwide Builders Convention in June. An earlier model misstated the context of the plans.