Apple shares rise after sales quell iPhone worries
03 May 2018, 02:11 | Virginia Benson
Image used for representational purpose
And, at the end of earnings - buoyed by stronger-than-expected results and the $100 billion stock buyback Apple also took the occasion of earnings to announce - it seems investors share Apple's optimism for now.
Applereported a 25.3 percent rise in earnings to $13.8 billion following 15.6 percent increase in revenues to $61.1 billion. The tech giant's shares surged as much as 5% in after-hours trading on Tuesday.
During the period of January to March, Applesaid that it sold 52.2 million iPhone.
The iPhone maker is raising its quarterly dividend by 16 per cent to 73 cents per share, matching the largest increase since Apple restored the payment under shareholder pressure six years ago.
That came on top of $22.8 billion in buybacks executed in the prior quarter, "a record amount for any issue in any quarter", analyst Howard Silverblatt said.
Taking into account of iPhone's revenue contribution and the iPhone ASP, Apple could achieve a 10 percent year-on-year growth in iPhone shipments in the current quarter with around 45 million units shipped.
"We were surprised somewhat that through all of this period of time that the iPhone X winds up as the [best] selling, most popular [device] for every week. since the launch" in November, Cook said Tuesday during a conference call with analysts.
"We sold 4.1 million Macs, generating year-over-year growth in many emerging markets, including Latin America, West Asia and Africa, central and eastern Europe and India", Maestri said.
Apple's stock price rose nearly 4% to $176.57 on Wednesday, at the high end of the price range where it has been mired since early November.
When it comes to fears about the iPhone X's performance, this report should "all but put them to rest", Motley Fool senior analyst Jeff Fischer said."Tim Cook and Apple are playing the long game", he added.
Analysts especially praised a big jump in revenues in Apple's services business, which is seen as an important element of diversification away from having revenues tied to gadgets.
Being too reliant on one product has its obvious pitfalls but there are also perhaps "hidden" benefits to generating more sales from the services business.
The iPhone is Apple's most important product, accounting for more than 60% of its revenue.
SINCE Apple said in January that it would bring back most of the US$252 billion it held overseas under the new tax law, investors have wondered what the company would do with the enormous cash pile.
"According to our estimates, iPhone X's production volume fell by 50% in the first quarter compared to the fourth quarter", Huang said.
Apple is said to be focusing on services after witnessing a slowdown in smartphone sales.
Apple bought shares worth $23.5bn in the three months to March. The firm noted that the implied iPhone units in the coming quarterly guidance was higher than investor expectations, and iPhone X was the number one selling phone in China. "And the infrastructure has come quite a ways since we began to put a lot of energy in there due to their leadership and so forth", Cook said.
"My own view is that China and the US have this unavoidable mutuality where China only wins if the USA wins and the US only wins if China wins", Cook said."So I'm a big believer that the two countries together can both win and grow the pie, not just allocate it differently and so that's our focus over time I think that view will prevail".
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