Apple shares rise as solid iPhone sales growth cheers Wall Street
Shares in Apple have risen after it reported solid phone sales growth in the latest quarter despite fears over demand for the iPhone X.
Wall Street was also cheered by the announcement of $100bn in share buybacks, doubling the reward for investors compared to the same period last year.
The stock climbed 3.6% in after-hours trading after Apple reported best-ever second quarter revenues of $61.1bn (£44.9bn), up 16% and ahead of expectations.
Apple also reported sales of 52.2 million iPhones for the three months to the end of March, up from 51 million a year earlier only just missing a Wall Street target of 52.3 million.
There had been increasing concerns about iPhone sales in the run-up to the results.
Analysts had feared the iPhone X model’s $999 price tag could have muted demand for the handsets.
But Apple chief executive Tim Cook said: “This is the first cycle that we’ve ever had where the top of the line iPhone model has also been the most popular.”
Average selling prices for iPhones rose to $728 from $655 a year ago – apparently helped by demand for the iPhone X – though this missed expectations of $742.
Mr Cook said: “It’s one of those things like when a team wins the Super Bowl, maybe you want them to win by a few more points.
“But it’s a Super Bowl winner and that’s how we feel about it.”
Apple had been seen as being under particular pressure as rivals undercut prices for its top iPhone models while the iPhone 8 range and 10th anniversary edition iPhone X received lukewarm reviews.
But investors were cheered by progress elsewhere – on confirmation the company was to reward shareholders through proceeds it was repatriating to the US following tax reforms announced by Donald Trump.
Luca Maestri, Apple’s chief financial officer, said: “With the greater flexibility we now have from access to our global cash, we can more efficiently invest in our US operations and work toward a more optimal capital structure.
“Given our confidence in Apple’s future, we are very happy to announce that our board has approved a new $100bn share repurchase authorisation and a 16% increase in our quarterly dividend.”
The company said it would complete the previous $210bn share buy-back programme during the current quarter.
Such moves are welcomed by investors mainly because they tend to concentrate the value of a holding for those who continue to keep shares.
Apple’s second quarter revenue included $9.1bn from its services business, which includes Apple Music, the App Store and iCloud.
Apple does not break down sales by iPhone model but chief executiv Mr Cook was delighted by the overall figures and forecast a mid-point revenue range of $52.5bn for the third quarter – above previous estimates.
He said: “We’re thrilled to report our best March quarter ever, with strong revenue growth in iPhone, Services and Wearables.