Apple reports 10% drop in iPhone sales but stock soares after a record stock buyback is announced

Apple reported its fiscal second-quarter results on Thursday after the stock market closed. The quarter was not so good for the iPhone with revenue attributed to the device coming in at $45.96  billion. That was not only a 10% decline year-over-year, it also fell short of the $46 billion that Wall Street analysts were expecting. Apple also weathered a 16.7% decline in iPad revenue. The fiscal second quarter generated $5.56 billion in iPad revenue.

The Services segment, the second-largest after the iPhone, took in an all-time record $23.87 billion during the three months, a 14.2% annual gain from last year’s fiscal second quarter. The Wearables, Home and Accessories unit, which includes the Apple Watch and AirPods, had revenue of $7.92 billion which was a 9.7% decline year-over-year. The Mac enjoyed a small 3.9% gain in sales to $7.45 billion.

Sales declined in all regions except for Europe where the Digital Markets Act (DMA) started to take effect early in March. The DMA allows those in the EU to sideload apps on their iPhones, pay for in-app purchases through a third-party payment platform, choose a non-WebKit browser to be the default browser on their devices, and more. Sales on the continent hit $24.12 billion during the quarter, up less than 1% compared to the same quarter last year.

Today’s earnings report is the first to include sales from the Apple Vision Pro

Sales in the Americas declines 1.4% to $37.27 billion. Sales in Greater China amounted to $16.37 billion (-8.1% year-over-year), while in the rest of the Asia-Pacific market Apple took in $6.72 billion which works out to a 17.2% annual drop.

Cook also said that Apple has “big plans to announce” from an “AI point of view” during its May 7th “Let Loose” event during which it will announce new iPad models for the first time since 2022. The executive also said that Apple grew iPhone sales in China during fiscal Q2 surprising some who expected Huawei’s resurgence to negatively impact Apple.

Company revenue was reported as $90.8 billion, off 4% from the same fiscal quarter in 2023. Net income, declining by 2.2%, came to $23.64 billion or $1.53 per share. That was flat with last year’s fiscal second quarter report.

Apple also announced a $110 billion plan to buy back shares, the largest such plan in the history of the company. After the report was released, Apple’s shares soared in after-hours trading rising $12.60 or 7.28% to $185.63 after closing the regular trading session at $173.03.