Apple Buoys Wall Street, Keeping Doubts on Future Growth at Bay
Apple Inc. rallied Friday after an iPhone rebound helped quarterly earnings beat estimates, even as overall sales at the world's most valuable company remain in decline.
The results suggest that Apple is beginning to recover from a slump that's plagued both the computer and smartphone industries. It was a particular relief for investors after Qualcomm Inc., a key supplier, raised fresh concerns about phone demand earlier this week. Apple's sales in China — a weak spot for other tech companies — also came in a bit better than feared.
As expected, Apple announced plans for $90 billion in stock repurchases — the same as last year's plan. The company also raised its quarterly dividend 4% to 24 cents a share.
The shares jumped 4.7% to $173.57, the biggest single-day increase since Nov. 30. That added $107 billion to Apple's market value and brings its year-to-date gain to 34%.
Overall revenue amounted to $94.8 billion in the fiscal second quarter, exceeding the $92.6 billion analysts predicted. Though the sales fell 2.5% in the period, the company had warned investors to expect a drop of roughly twice that.
Though the performance was better than expected, it marked two straight quarters of sales declines — a first for Apple since the pandemic began. Earnings, meanwhile, were unchanged from a year earlier, at $1.52 a share. That compared with an average estimate of $1.43 a share.
On a conference call with analysts, Apple said that revenue in the current period would drop by a similar amount as in the past quarter, which ended April 1. That suggests a dip of about 3%. The company also said it would continue to see a negative impact from foreign exchange rates.
The prospect of Apple suffering a third consecutive sales drop raises
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