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Apple Inc. has reported a revenue dip in its latest fiscal quarter for the second consecutive time, but the company’s performance was better than Wall Street’s muted expectations. Apple posted earnings of $24.16 billion, or $1.52 per share, in the three-month period that ended on April 1, slightly down from the $25.01 billion posted the previous year. However, the results beat the average estimates of analysts, who were predicting earnings of $1.43 per share on revenue of $92.91 billion.
The dip in revenue, which fell 3% to $94.84 billion, was due to the pandemic-driven restrictions on its China factories curbing sales of the latest iPhone during the holiday season. Despite the revenue dip, Apple’s sales of iPhones were solid, bringing in $51.33 billion in revenue in the first quarter, surpassing the average estimates of $48.66 billion. The company’s key services division also performed well, posting revenue of $20.91 billion, slightly above Wall Street’s estimates of $20.66 billion.
Apple CEO Tim Cook acknowledged “ongoing challenges” related to the broader economic environment but stated that the company is continuing to “manage for the long term.” Unlike many of its tech industry peers, Apple has not signaled any intention to resort to mass layoffs.
Apple’s board also approved a $90 billion share buyback program and raised its regular quarterly dividend by 4% to 24 cents a share. The company expects its revenue performance in the current fiscal third quarter to be “similar” to the second quarter, but analysts are forecasting $84.5 billion, which is well below what Apple is suggesting.
Wedbush analyst Dan Ives said that Apple’s iPhone sales performance was a clear indication that the company is continuing to gain market share in China, calling it a “LeBron-like March,” referring to basketball star LeBron James.
Overall, despite the revenue dip, Apple’s solid performance has reassured investors and demonstrated the company’s resilience in navigating the ongoing challenges posed by the pandemic.
In addition to strong iPhone sales, Apple’s services division, which includes Apple Music, Apple TV+, iCloud, and the App Store, also posted solid results. The division generated $20.91 billion in revenue, slightly above Wall Street’s estimates of $20.66 billion. The company’s wearables, home, and accessories division, which includes the Apple Watch and AirPods, also reported strong sales, with revenue of $7.84 billion, up from $6.28 billion a year earlier.
Apple’s stock rose about 3% in after-hours trading following the earnings report, reflecting investors’ positive response to the company’s performance. The company’s revenue decline was less than expected, and its outlook for the current quarter was optimistic.
CEO Tim Cook said during the earnings call that the company is seeing strong demand for its products across all markets and that the pandemic has accelerated the shift to digital services. He also highlighted the company’s commitment to privacy and security, saying that Apple is “doubling down on privacy in everything we do.”
Apple’s strong performance comes as the company faces increasing scrutiny from regulators and lawmakers over its App Store practices and other business practices. The company is currently involved in several high-profile legal battles, including a lawsuit with Fortnite maker Epic Games over the App Store’s fees and policies.
Despite these challenges, Apple has maintained its position as one of the world’s most valuable companies, with a market capitalization of more than $2 trillion. The company’s strong financial performance, combined with its commitment to innovation and design, has helped it maintain a loyal customer base and attract new customers around the world.