Apple: iPhone revenue of $45.963 billion in the second fiscal quarter fell short of analysts' expectations

Apple Inc. today released its results for the second quarter of fiscal 2024: total net revenue of $90.753 billion, down 4% year-on-year, and net profit of $23.636 billion, down 2% year-on-year. Apple's revenue in Greater China in the second fiscal quarter was $16.372 billion, down 8% year-on-year (Note: Apple's fiscal year is not synchronized with the calendar year, and October 2023 to September 2024 is the 2024 fiscal year).

Apple's second-quarter diluted earnings per share and revenue beat Wall Street analysts' expectations, pushing its shares up more than 6% in after-hours trading.

Apple's Board of Directors approved a 4% increase in the quarterly dividend to a cash dividend of $0.25 per share to the Company's common stockholders, which will be paid on May 16, 2024 to shareholders of record as of the close of business on May 13, 2024.

In addition, Apple's board of directors has approved another share repurchase program that will repurchase up to $110 billion worth of common shares in the future. According to data provided by Birinyi Associates, a stock market research firm, this is the largest share buyback program in Apple's history.

Detailed Performance:

In the fiscal second quarter ending March 30, 2024, Apple's net profit was $23.636 billion, down 2% from $24.160 billion in the same period last year, and diluted earnings per share were $1.53, a slight increase from $1.52 in the same period last year. Apple's total shares outstanding in the fiscal second quarter were 15464709, compared with 15847050 in the year-ago quarter.

Apple's operating profit for the fiscal second quarter was $27.900 billion, down from $28.318 billion in the same period last year.

Apple's total net revenue for the second fiscal quarter was $90.753 billion, down 4% from $94.836 billion in the same period last year. Among them, Apple's net revenue from products in the second fiscal quarter was $66.886 billion, down from $73.929 billion in the same period last year, and net revenue from services was $23.867 billion, an increase from $20.907 billion in the same period last year.

Apple's gross profit in the second fiscal quarter was $42.271 billion, an increase from $41.976 billion in the same period last year.

Apple's fiscal second-quarter diluted earnings per share and revenue both beat Wall Street analysts' expectations. According to data provided by Yahoo Finance, 27 analysts had expected Apple to earn $1.5 per share in the fiscal second quarter, and 25 analysts had expected Apple to report $90.01 billion in revenue in the fiscal second quarter.

By Region:

Apple's revenue in the Americas in the second fiscal quarter was $37.273 billion, down from $37.784 billion in the same period last year;

European segment revenue was $24.312 billion, an increase from $23.945 billion in the same period last year;

Greater China revenue was US$16.372 billion, down 8% from US$17.812 billion in the same period last year;

Japan segment revenue was $6.262 billion, down from $7.176 billion in the same period last year;

Revenue in the Rest of Asia Pacific was $6,723 million, down from $8,119 million in the year-ago quarter.

By product:

Apple's revenue from iPhones in the second fiscal quarter was $45.963 billion, down from $51.334 billion in the same period last year, failing to meet analysts' expectations. According to data provided by LSEG (formerly known as Refinitiv), a provider of financial market data information and infrastructure, analysts had expected Apple's iPhone revenue to reach $46 billion in the fiscal second quarter.

Revenue from Mac was $7.451 billion, up from $7.168 billion in the same period last year, beating analysts' expectations. According to data provided by LSEG, analysts had expected Apple's second-quarter Mac revenue to reach $6.86 billion on average;

Revenue from iPad was $5.559 billion, down from $6.670 billion in the same period last year, and missed analysts' expectations. According to data provided by LSEG, analysts had expected Apple's second-quarter iPad revenue to reach $5.91 billion on average;

Revenue from wearables, home devices and accessories was $7.913 billion, down from $8.757 billion in the same period last year and missing analysts' expectations. According to data provided by LSEG, analysts had expected Apple's revenue from wearables, home devices and accessories to reach $8.08 billion in the second fiscal quarter.

Revenue from services was $23.867 billion, an increase from $20.907 billion in the same period last year, exceeding analysts' expectations. According to data provided by LSEG, analysts had expected Apple's second-quarter services revenue to reach $23.27 billion on average.

Apple's total cost of sales in the second fiscal quarter was $48.482 billion, down from $52.860 billion in the same period last year. Among them, the cost of sales of products was US$42.424 billion, down from US$46.795 billion in the same period last year, and the cost of sales of services was US$6.058 billion, basically unchanged from US$6.065 billion in the same period last year.

Apple's total operating expenses for the second fiscal quarter were $14.371 billion, up from $13.658 billion in the same period last year. Among them, R&D expenditure was US$7,903 million, up from US$7,457 million in the same period last year, and selling, general and administrative expenses were US$6,468 million, up from US$6,201 million in the same period last year.

Return of Capital Plan:

Apple's Board of Directors approved a 4% increase in the quarterly dividend to a cash dividend of $0.25 per share to the Company's common stockholders, which will be paid on May 16, 2024 to shareholders of record as of the close of business on May 13, 2024.

In addition, Apple's board of directors has approved another share repurchase program that will repurchase up to $110 billion worth of common shares in the future.

Business outlook:

Apple did not provide a formal outlook in its earnings report, but CEO Tim Cook said in an interview with the media that overall sales in the fiscal third quarter are expected to grow by "low single-digit digits" on a percentage basis.

In addition, in an analyst conference call following the earnings release, Apple's CFO Luca Maestri said that the company expects iPad sales to grow by double digits year-over-year in the fiscal third quarter, in percentage terms, while adding that Apple's services division is expected to continue to grow at the pace of the past two quarters.

Stock Price Movement:

On the day, Apple's stock price rose $3.73, or 2.20%, to close at $173.03 on the Nasdaq.

In the subsequent after-hours trading as of 5:42 p.m. EST on the 2nd (5:42 a.m. Beijing time on the 3rd), Apple's stock price rose sharply by $11.17 again, or 6.45%, to $184.20. Over the past 52 weeks, Apple's highest price was $199.62 and its lowest price was $164.08.