APPLE UNVEILS RECORD US$110B SHARE BUYBACK
Tech giant’s fiscal Q2 revenue down 4pc to US$90.8b, beating average analyst estimate
APPLE Inc’s quarterly results and forecast beat modest expectations on Thursday, as the iPhone maker unveiled a record share buyback programme, sending its stock up six per cent in extended trade.
Apple increased its cash dividend by four per cent and authorised an additional programme to buy back US$110 billion of stock. The buyback is the largest in the company’s history.
Apple’s quarterly revenue fell, but less than analysts had expected, and chief executive Tim Cook said revenue growth would return in the current quarter.
The results and guidance suggest the company may be regaining its footing in the smartphone market, despite stiff competition and regulatory challenges.
The surge in Apple’s shares following its report lifted its stock market value by over US$160 billion.
Apple said fiscal second-quarter revenue fell four per cent to US$90.8 billion, beating the average analyst estimate of US$90.01 billion, according to LSEG data.
For Apple’s current quarter, which ends in June, Cook said the iPhone maker expected “to grow low-single digits” in overall revenue. Wall Street expected 1.33 per cent revenue growth to US$82.89 billion, according to LSEG data.
Long considered a must-own stock on Wall Street, Apple shares have underperformed other Big Tech companies in recent months, falling 10 per cent this year as it struggles with weak iPhone demand and tough competition in China.
Apple expects current-quarter services and iPad revenue to grow by double digits, chief financial officer Luca Maestri told analysts on a conference call. The company expects gross margins of between 45.5 and 46.5 per cent for the fiscal third quarter.
Apple faces a raft of challenges across its business. Smartphone rivals such as Samsung Electronics have introduced competing devices aimed at hosting artificial-intelligence 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. In the United States, the Justice Department in March accused Apple of monopolising the smartphone market and driving up prices.
For the fiscal second quarter, iPhone sales fell 10.5 per cent to US$45.96 billion, compared with analyst expectations of US$46 billion. Apple executives said in February the year-ago fiscal second quarter had benefited from a US$5 billion surge in iPhone sales as the company caught up from supply-chain snarls during the pandemic.
Excluding that one-time phenomenon, iPhone sales were down only slightly as the Cupertino, California, company’s signature product faces stiff competition. In China, Huawei Technology has gained market share.
Cook said iPhone sales still experienced “growth in some markets, including China”.
Apple has said little about its product plans for artificial intelligence.
The company started ramping up research and development (R&D) spending last year, and Cook said the company had spent more than US$100 billion on R&D in the past five years.