Summits Yellow

Apple reports drop in iPhone sales but revenue still on the up

Tyrone Stewart

AppleApple managed to sell 50.8m iPhones in the second quarter of its fiscal year, down from 51.2m in the same period last year. Despite this, it reported a quarterly revenue of $52.9bn (£40.9bn) and quarterly earnings per diluted share of $2.10 for the second quarter of its fiscal 2017 – both up from $50.6bn and $1.90 year-on-year (YoY) respectively. International sales accounted for 65 per cent of Apple’s Q2 revenue.

The tech giant’s Services business topped $7bn for the second quarter running, with Apple CEO Tim Cook stating, in an earnings call, that it was “well on its way to being the size of a Fortune 100 company.” Meanwhile, the App Store grew by 40 per cent YoY, with the number of developers growing by 26 per cent.

In addition, Apple Music subscriptions and iCloud store both saw double-digit revenue growth.

 “We are proud to report a strong March quarter, with revenue growth accelerating from the December quarter and continued robust demand for iPhone 7 Plus,” said Cook. “We’ve seen great customer response to both models of the new iPhone 7 (Product)Red Special Edition and we’re thrilled with the strong momentum of our Services business, with our highest revenue ever for a 13-week quarter. Looking ahead, we are excited to welcome attendees from around the world to our annual Worldwide Developers Conference next month in San Jose.”

Apple also announced that its board had authorised an increase of $50bn to the company’s program to return capital to shareholders. Furthermore, the board had increased its share repurchase authorisation to $210bn from $175bn YoY.

“We generated strong operating cash flow of $12.5 billion and returned over $10 billion to our investors in the March quarter,” said Luca Maestri, Apple’s CFO. “Given the strength of our business and our confidence in our future, we are happy to announce another $50 billion increase to our capital return program today.”

Looking ahead, Apple expects revenues of between $43.5bn and $45.5bn for its 2017 third quarter, with a gross margin of between 37.5 per cent and 38.5 per cent. It expects operating expenses to fall between $6.6bn and $6.7bn.