Apple delivers best-ever second quarter despite sales worries

With revenues of over $61bn, Apple beat its 2015 record in the report released Tuesday – but sales of its most valuable product are slowing

Apple on Tuesday shook off worries that its $1,000 iPhone had failed to live up to the hype – but sales of the world’s most valuable company’s most valuable product are slowing, and Apple has announced a plan to buy its way out of trouble.

Releasing its latest quarterly report, Apple announced it had sold 52.2m iPhones in the quarter ending 31 March, at an average price of $728.54. Sales were up 3% compared to last year and slightly lower than analysts had expected, but numbers beat the gloomiest forecasts and were enough to deliver Apple its best second quarter ever, with revenues of over $61bn. That beat the record of $58bn set in 2015.

“We’re thrilled to report our best March quarter ever, with strong revenue growth in iPhone, services and wearables,” said Tim Cook, Apple’s chief executive officer. “We are very bullish on Apple’s future,” Cook told analysts after the news broke.

Apple sold 9.11m iPads and 4.08m Macs over the quarter.

Analysts had worried that the high-priced iPhone X would dent sales. The results came after Apple suppliers including AMS and Taiwan Semiconductors have reported slowing revenues in a sign seen by analysts as proof of shaky demand for iPhone X.

The company announced it would be adding $100bn to its stock buyback programme, plus a 16% increase in its quarterly dividend. Taking advantage of the Trump administration’s new tax laws, Apple is in the process of repatriating the majority of the $252bn in profits it currently holds overseas.

The buyback helped Apple’s shares rise over 5% in after-hours trading. The company’s stock has risen by about 80% in the past two years, setting it on course to battle Amazon to become the first company to be valued at $1tn. But Apple’s share price has stumbled recently as fears about slowing iPhone sales took their toll.

The iPhone remains Apple’s biggest product, even as sales of services and other items, including the Apple Watch, have grown. Services – from the Apple Store, iCloud, Apple Pay and others – generated $9bn over the quarter. But the 11-year-old mobile device accounts for the majority Apple’s revenues and contributed $100bn over the quarter. Despite the better-than-expected results, however, sales are slowing.

Thomas Husson, principal analyst at Forrester, said the results did not mean innovation in the high-end smartphone is dead.

Husson said: “However, it indicates Apple will have to smartly manage its iPhone product portfolio and pricing, especially in Asia, where some countries still witness smartphone growth Apple has proven over the past few years that it masters the art and science of managing its product portfolio.”Yet Husson believes 2018 represents a tipping point for Apple. “It has no choice but to demonstrate it can reduce its dependency on iPhone sales and enter new adjacent markets and territories,” he said. “Because it’s a human-centered and ideas-driven marketing company, Apple is still the most valuable brand worldwide and it would be a mistake to make too early a call based on this quarterly financial earnings.”

On a call with analysts Cook was once again critical of tech rivals, including Facebook, that have been rocked by privacy scandals. “We believe privacy is a fundamental human right,” he said.


Dominic Rushe in New York

The GuardianTramp

Related Content

Article image
Apple under fire over reports students worked illegal overtime to build iPhone X
Manufacturing partner Foxconn had student interns working 11-hour days to make most expensive iPhone ever

Alex Hern

21, Nov, 2017 @5:01 PM

Article image
Apple shares hit record high as iPhone X pre-sales fuel 19% rise in profits
Company value soars to $868bn as CEO Tim Cook says: ‘This was our biggest year ever in most parts of the world’

Dominic Rushe in New York

02, Nov, 2017 @10:05 PM

Article image
Apple reports first decline in revenues and profits in over a decade
Company blames iPhone sales and a downturn in China for reduced revenue, a day after it scrambled to fix FaceTime glitch

Dominic Rushe in New York

29, Jan, 2019 @10:29 PM

Article image
iPhone 7 launch: Apple gambles on headphone jack and introduces new Apple Watch
New design paired with release of AirPods that represents characteristic gamble for tech firm in bid to outpace rivals and usher in wireless listening

Sam Thielman

08, Sep, 2016 @6:09 AM

Article image
Apple hints 'iPhone 8' won't be delayed as company's shares hit record high
Shares in the world’s most valuable company went up close to 6% in after-hours trading following the news, adding $40bn to Apple’s current value

Dominic Rushe

01, Aug, 2017 @9:19 PM

Article image
iPhone X: thousands queue as Apple proves it still has the X factor
Demand for the £999 ‘future’ of the iPhone bucks the trend of recent years, with large crowds and some fans queuing for days to get their hands on one

Samuel Gibbs

03, Nov, 2017 @11:30 AM

Article image
Apple stock continues tumble despite better-than-expected earnings
Shares off 5% before lunchtime on Wednesday even in face of Apple Watch’s likely $1bn sales as analysts say investors are spoiled by company’s success

Sam Thielman in New York

22, Jul, 2015 @4:48 PM

Article image
Apple profits up 124% year-on-year after record iPhone sales

Steve Jobs unveils $7bn profit in second-quarter results amid hints the next version of iPhone will be released in September. By Charles Arthur

Charles Arthur

19, Jul, 2011 @11:00 PM

Article image
Apple sales rise – but fail to soar

Weaker iPhone sales than expected prompt questions over release date of latest smartphone model

Charles Arthur, technology editor

18, Oct, 2011 @11:12 PM

Article image
Apple records most profitable quarter ever as sales soar amid pandemic
Company announces sales for last three months of 2020 totalled $111.4bn, fueled largely by release of latest iPhones

Dominic Rushe

27, Jan, 2021 @10:24 PM