Apple's Stock Skyrockets Following Less Than Expected Decline in iPhone and China Sales; Unveils Historic $110 Billion Buyback

Apple's Earnings Report

As the majority of megatechs have already shared their earnings, the spotlight was on the last of the Mag7 to report during the peak of earnings season. This company, which until recently held the title of the undisputed market cap world champion, was overtaken by the Microsoft juggernaut. Despite the AI-driven euphoria enjoyed by some of its giga cap peers, Apple's stock had been stagnant for months. However, it saw a significant recovery after hours when Apple not only reported excellent earnings but also announced a massive, record-breaking $110 billion stock buyback program. This move sent the stock soaring after hours.

Apple's Quarterly Report

For the quarter ending on March 31, Apple reported an EPS of $1.53, beating the estimated $1.50. The revenue was $90.75 billion, down 4.3% year-on-year primarily due to weakness in China, but it still beat the recently lowered estimate of $90.33 billion. Despite a decline in sales across almost every region, the 8.1% drop in China sales was not as bad as analysts had expected.

Apple's Product Sales

As expected, iPhone sales dropped 10% in a quarter, which was anticipated to be challenging for the iPhone maker. However, at $46 billion, they slightly beat expectations. The rest of the product suite had mixed results, with Macs surprisingly beating estimates while both iPads and wearables missed. The trend is clear: while sales may not be plummeting, they have certainly plateaued, and the only thing still rising is Services.

Apple's Geographic Sales Breakdown

While sales declined across almost every region, with the notable exception of Europe, the 8.1% drop in China sales was not as bad as consensus expected. Apple's CFO, Maestri, stated that the China concerns were overblown and that they were pleased with their results in China. CEO Cook also pushed back on the idea that the iPhone was suffering in the country, saying that revenue from the device actually grew in mainland China.

Apple's Future Plans

Apple announced a new stock buyback program of $110 billion, surpassing the previous record set by Apple itself. The company also projected a return to growth in the current period, sparking optimism that a slowdown is easing. Apple plans to unveil new iPads on May 7, marking the first updates to its tablet line in 1 1/2 years. Furthermore, Apple is planning a long-awaited push into generative artificial intelligence, with CEO Tim Cook expected to outline Apple's AI strategy at its annual Worldwide Developers Conference in June.

This article provides a detailed look at Apple's recent earnings report and the company's future plans. It's interesting to see how Apple is navigating the challenges and opportunities in the tech industry. What are your thoughts on this? Do you think Apple's strategies will help it maintain its position in the market? Share this article with your friends and let us know your thoughts. Don't forget to sign up for the Daily Briefing, which is every day at 6 pm.