Apple Rallies on Upbeat Forecast, Record-Setting Stock Buyback
Apple Inc. shares jumped in late trading after the company posted stronger-than-expected sales last quarter and predicted a return to growth in the current period, sparking optimism that a slowdown is easing.
Though revenue fell 4.3% to $90.8 billion in the March quarter, that was better than the $90.3 billion predicted by analysts. Profit also topped Wall Street projections in the period, and Apple announced the biggest stock buyback in US history.
The results came as a relief to investors, who have been waiting for the iPhone maker to pull out of a long slump. Apple has posted sales declines in five of the past six quarters, hurt by a sluggish smartphone market and headwinds in China. The company had warned analysts in February that revenue in the latest period would be down about 5% from a year earlier.
In the current period, Apple expects sales to climb by a percentage in the low single digits. The company predicted that both its iPad and services business would grow by a rate in the double digits, but declined to give a forecast for the iPhone — its flagship product.
The shares gained as much as 7.9% in extended trading Thursday after the report was released. Apple had been down 10% to $173.03 this year through the close.
Earnings amounted to $1.53 a share in the fiscal second quarter, which ended March 30. That exceeded the $1.50 analysts had estimated. Apple increased its dividend 4% to 25 cents a share, in line with expectations. And the board approved plans to buy back an additional $110 billion of the company's stock.
A lack of innovative new devices has contributed to slow sales at Apple, but the company looks to begin rectifying that on May 7. That's when it plans to unveil new iPads — the first updates to its tablet line in 1 1/2 years.
The Cupertino, California-based company also is planning a long-awaited push into generative artificial intelligence. In June, Chief Executive Officer Tim Cook is expected to lay out Apple's AI strategy at its annual Worldwide
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