Apple’s 2Q profit at $11B; iPhone sales slip

CUPERTINO, Calif. — Apple Inc. on Tuesday reported a fiscal second-quarter profit of $11.03 billion, and falling iPhone sales.

The Cupertino, Calif., company said it had profit of $2.10 per share.

The results beat Wall Street expectations. The average estimate of 14 analysts surveyed by Zacks Investment Research was for earnings of $2.02 per share.

The maker of iPhones, iPads and other products posted revenue of $52.9 billion in the period, also topping Wall Street forecasts. Ten analysts surveyed by Zacks expected $52.61 billion.

For the current quarter ending in July, Apple said it expects revenue in the range of $43.5 billion to $45.5 billion. Analysts surveyed by Zacks had expected revenue of $45.05 billion.

Investor confidence has been mounting ahead of a major upgrade to the iPhone set for release later this year.

Apple sold 50.8 million iPhones in the quarter that ended April 1, down from 51.2 million units in the same period a year earlier, and fewer than the 51.4 million predicted in a Bloomberg survey of analysts. Sales in China fell 14 percent — less precipitously than last year.

“We expect our performance in China to continue to improve as we go through the year,” Chief Financial Officer Luca Maestri said in an interview.

Apple shares slipped more than 2 percent in extended trading, after release of the results. The shares jumped 27 percent this year and rose 93 cents Tuesday to close at $147.51 as traders continue to anticipate an iPhone 8 release in the fall. BGC Partners analyst Colin Gillis said before earnings were released that any weakness in iPhone sales might spark a sell-off in the stock.

Much is riding on the success of the iPhone 8. Smartphone-sales growth has been slowing and Apple has lost market share in China, a major source of growth before last year, as competition from local rivals increased.

“Chinese vendors such as Huawei, Oppo and Vivo continue to make life really hard for Apple in the region,” John Butler, a Bloomberg Intelligence analyst, said.

Apple had $256.8 billion in cash and equivalents at the end of the quarter. The company said it will return more of that to shareholders, announcing $50 billion in new buybacks and a 63-cent dividend.

As Apple’s stash of cash grows, so does the possibility that the world’s most valuable company will use some of the money for a huge acquisition that would expand its empire beyond iPhones and other gadgets.

So far, the guessing game has primarily focused on possible targets such as Netflix and Tesla Motors. Either deal could make sense, given Apple’s long-running interest in providing a TV service to consumers and its more recent work on self-driving cars.

In recent months the takeover talk has swirled around whether Apple might do something even more dramatic by making a bid for Walt Disney Co.