- Apple has reported its revenues were down four percent for the second quarter of the financial year.
- But it still made over $90 billion and declared a dividend payout to happy shareholders.
- With sales better than expected, even in countries with tougher markets like China, Apple is now betting on AI and new iPad devices to push future profits.
In the face of harsh competition from smartphone makers like Samsung and Huawei, Apple has managed to beat revenue expectations for its second quarter of the year.
The Cupertino tech giant reported that despite revenues being down four percent year over year, the company still raked in $90.8 billion, and earnings per diluted share sat at $1.53. Analysts were expecting a larger dip in revenues.
Apple did so well in the quarter against expectations that its board of directors even declared a cash dividend of $0.25 per share of the company’s stock, a four percent increase. Shareholders will be paid on 16th May 2024.
“Today Apple is reporting revenue of $90.8 billion for the March quarter, including an all-time revenue record in Services,” said Tim Cook, Apple’s CEO, in the company’s latest earnings announcement. The quarter is notable for the launch of the expensive Apple Vision Pro, with Cook adding that Apple is set to announce new products next week at the first Apple Event of the year.
We are expecting Apple to reveal a new Apple Pencil, new iPad devices and perhaps (if rumours hold true) some sort of foldable device.
“Our active installed base of devices has reached a new all-time high across all products and all geographic segments, and our business performance drove a new EPS record for the March quarter,” said Luca Maestri, Apple’s CFO.
“Given our confidence in Apple’s future and the value we see in our stock, our Board has authorised an additional $110 billion for share repurchases. We are also raising our quarterly dividend for the twelfth year in a row,” he added.
The company seems to be weathering multiple storms exceptionally, thanks to its enormous base of loyal customers and users. This is in the face of faltering sales in China, as the likes of Huawei edge the American firm out of the local market.
Reports indicate that Huawei is sitting at just 0.2 percent less market share in terms of smartphone sales than Apple in China, and is rapidly gaining on them. If Huawei outpaces Apple, the iPhone maker will fall to the fourth-best selling in the Asian country, when it traditionally held a higher spot in the hearts and wallets of the Chinese.
In contrast, Apple says its decline in China was still not as steep as predicted by analysts.
Back on the homefront, Apple is facing a lawsuit from the United States government, which alleges that the company is inflating its prices and conducts its business in an effort to stamp out the competition and maintain a monopoly.
Despite these issues, Apple’s investors welcomed the earnings and especially the dividend announcement, as Apple shares were up 6 percent in extended trading, and are trading up 2.2 percent at press time.
As for the future, Apple is betting on new iPad devices and generative AI to push sales in the next few quarters. For AI, Cook said the company has spent $100 billion on research in the past five years.
“We continue to feel very bullish about our opportunity in generative AI and we’re making significant investments,” he said. “We’re looking forward to sharing some very exciting things with our customers,” he told Reuters.
In March, it was reported that Apple purchased AI startup DarwinAI to automate certain manufacturing processes. Apple is expected to debut generative AI features on its mobile devices in the near future.
