Wall Street was expecting earnings of $2.36 per share on revenue of $57.37 billion. Together, sales in the March quarter hit a record $5.1 billion, up from $3.94 billion in the year-ago quarter. Apple spent a record US$27 billion on share buybacks and dividends during the fiscal second quarter. Apple's Q2 earnings were high because of improved global iPhone sales. Revenues in the Americas were slightly higher, while Europe and the rest of the world showed slightly lower revenues.
Q2 iPhone revenue was $31.05 billion vs. $31.10 billion expected forecast by consensus estimates.
However, Apple's other units did fairly well: iPad sales increased from $6 billion in Q2 2018 to $6.8 billion in Q2 2019, while its wearables, home, and accessories division went from $6 billion to $7 billion. This growth is important both because services is Apple's second-largest segment and it boasts a meaty 64 percent gross profit margin.
Guidance for Apple's fiscal third quarter was higher than expected, suggesting Apple's iPhone demand machine is stabilizing again and that services revenue continues to grow.
After Apple slashed prices in China, iPhone sales picked up toward the end of the quarter and revenue rose from iPads, wearables and services.
The executives noted the company has more than 390 million paid subscriptions, up 30 million from the previous quarter. Also, Director Arthur D. Levinson sold 1,521 shares of the stock in a transaction dated Friday, February 1st.
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But the company will have to exercise caution as it builds the services business.
Post the discount in April, the iPhone XR is now selling for Rs 59,990 for the base model, down by Rs 17,000 from its original price of Rs 76,990. Apple's shares saw a boost following the quarterly earnings filing.
The arrival of next-generation 5G service is set to compel more mobile customers to upgrade their smartphones as the advanced network requires the newest devices.
In its press release regarding the latest results, Apple chose not to mention iPhone.
Talking about what it has learned from the iPhone pricing corrections it did in China to fix dwindling sales in the country, Cook revealed that Apple has already made price adjustments in India and the "preliminary results have been positive".
Against this backdrop, the launch of Apple News+ and Apple TV+, as well as the Apple Arcade, will play a key role in driving the growth of services. But Apple also needs to generate more excitement for its brand with greater innovation and new hardware categories, such as augmented reality (AR) headsets, to urge more people to buy its devices.