Ahead of Apple's latest earnings report, the company found itself in an unfamiliar situation. While shareholders, investors and analysts usually expect nothing but the best from arguably the most successful company of the past decade, expectations were very low this time around. Throughout the past quarter, there had been countless reports of lackluster iPhone sales, difficulties in China and more, resulting in Apple's share price slumping along with the sentiment surrounding the company. The beauty of low expectations is that they're easily surpassed, though, which is exactly what Apple did. By delivering results that weren't quite as bad as expected and announcing a huge $110 billion stock buyback, the company pleased investors, sending its share price up 7 percent in pre-market trading on Friday.
Revenue for Apple's second fiscal quarter ended March 30 was down 4 percent to $90.8 billion, as iPhone sales declined more than 10 percent compared to the same quarter a year ago. There is an asterisk to these numbers, however, as Apple pointed out that last year's March quarter profited from pent-up iPhone 14 demand following supply constraints in the preceding holiday quarter, shifting roughly $5 billion in sales from the holiday quarter to the traditionally weak March quarter. Excluding that effect, sales would have grown year-over-year, as CEO Tim Cook pointed out in the company's earnings call.
iPhone sales, still at the heart of Apple's business, declined 10.5 percent to $46 billion in the March quarter, which is traditionally significantly weaker than the holiday quarter. Apple's services business was once again the star of the show, as it grew 14 percent to a new record of $23.9 billion, more than a quarter of total sales. Considering that Apple now boasts an installed base of more than 2.2 billion active devices and more than a billion paid subscription across its services, the segment looks like a cash cow for years to come for the company.
Looking ahead, Apple expects to return to "low single digit growth" in the June quarter as services are expected to see continued double-digit growth and iPad sales are about to get a shot in the arm by the new models due to be announced next week.
