Apple sales engineers in front of Apple product advertisements in the World Trade Center in New York City.
Robert Nickelsberg | Getty Images
Apple reported earnings for its March quarter Tuesday that fell in line with expectations, although revenue was down from the same period last year. However, Apple's guidance for the next quarter was higher than expected.
Apple stock spiked over 4% in extended trading.
Here's how Wall Street expected:
- EPS: $ 2.46 vs $ 2.36 Refinitiv consensus estimates
- Revenue: $ 58.02 billion vs. $ 57.37 billion forecast by Refinitiv consensus estimates
- Q2 iPhone revenue: $ 31.05 billion vs. $ 31.03 billion, forecast by Refinitiv consensus estimates
- Q2 services revenue: $ 11.45 billion vs. $ 11.37 billion, forecast by Refinitiv consensus estimates
- Q3 revenue projected: $ 52.5 to $ 54.5 billion vs. $ 51.94 billion forecast by Refinitiv consensus estimates
Apple's total sales were down 5% from the same period last year.
Guidance for Apple's Fiscal Third Quarter was higher than expected, suggesting Apple's iPhone demand machine is revving again and that revenue revenue continues to grow. In January, Apple cut its first-quarter forecast, blaming slow iPhone sales in China.
iPhone revenue was also down 17.33% year-over-year. iPhone revenue account for 53.5% of Apple's revenue for the quarter, which is lower than it has historically been.
In an interview with CNBC's Josh Lipton, CEO Tim Cook said Apple's performance in China had improved over the previous quarter and saw greater strength towards the end of the quarter. Cook also said that sales tax cut had helped reduce the price of Apple products, which had helped. Cook said that the trade relationship between the United States and China had improved as well.
"The tone is much better than it was in the November-December timeframe. I think that consumer affairs in a very positive way," Cook said.
"I believe that the trade relationship – I don't mean the tariff, I mean the tone – is much better today than it was in the November-December time frame.
Apple said it had $ 10.22 billion in sales in its Greater China category, which also includes Taiwan and Hong Kong.
Apple also said it would spend $ 75 billion on share repurchases and it also approved 75 cent dividend per share, and 5% increase. Apple announced it would spend $ 100 billion during this last year period.
Apple has recently been signaling to investors that iPhone sales aren't the critical number to watch. Apple instead of its services revenue, which includes products like iCloud, Apple Music, AppleCare warranties and others. Apple reported $ 11.45 billion in revenue, which is 16% from the same time last year.
Apple is not providing a new installed base figure from its last update of 1.4 billion devices, but it did not say that it hit all last time across all categories.
Apple's individual product lines are still critical for the company. Recently, it has been highlighting the strength of its Wearables business, which includes Apple Watch, AirPods, and other 30% year-over-year.
Here's how the product lines break down:
- iPhone: $ 31.05 billion vs. $ 31.10 billion expected
- iPad: $ 4.87 billion vs. $ 4.21 billion expected
- Mac: $ 5.5 billion vs. $ 5.85 billion expected
- Wearables: $ 5.1 billion vs. $ 4.79 billion expected
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