Apple Inc. (NASDAQ: AAPL) the stock rose over 7.1% on 1st May, 2019 (As of 11:40 am GMT-4; Source: Google finance) after the company posted better-than-anticipated results from its new products and services in the fiscal second quarter of 2019. Apple has been scrambling to develop new revenue streams amid stagnant growth and increased competition in the smartphone market, which has been the company’s main profit driver
AAPL in the second quarter of FY 19 has reported the adjusted earnings per share of $2.46, beating the analysts’ estimates for the adjusted earnings per share of $2.37. The company had reported 5 percent fall in the adjusted revenue to $58 billion in the second quarter of FY 19, beating the analysts’ estimates for revenue of $57.55 billion. The company grew year-over-year in developed markets, and while the company had record March quarter results in a number of major markets including the United States, Canada, the United Kingdom, and Japan, the company did experience a revenue decline in emerging markets. However, the company’s year-over-year revenue performance in Greater China improved relative to the December quarter.
Moreover, it was the best quarter ever for Services with revenue reaching $11.5 billion. AAPL had a strong quarter for iPad, with revenue up 22% from a year ago and was another strong quarter for Wearables with growth near 50%.
Meanwhile, Apple’s core iPhone business, which accounts for about two-thirds of total sales, has been hobbled by smartphone owners holding onto devices longer and by competition in China where local competitors offer lower-priced, feature-rich handsets. Its iPhone sales fell 17% in the quarter to about $31 billion. Apple blunted the damage from its iPhone business by extending the robust growth of services like app sales and streaming-music subscriptions, which collectively jumped 16%.
AAPL has declared a cash dividend of $0.77 per share of the Company’s common stock, an increase of 5 percent. The dividend is payable on May 16, 2019 to shareholders of record as of the close of business on May 13, 2019. Apple has spent 27 billion dollars on share buybacks and dividends during the second quarter, and it will set aside 75 billion dollars for share repurchases.
For the third quarter of FY 19, the revenue is expected to be between $52.5 billion and $54.5 billion, gross margin is expected to be in the range of 37 percent and 38 percent, operating expenses is expected to be in the range of $8.7 billion and $8.8 billion, other income/(expense) to be of $250 million and tax rate to be of approximately 16.5 percent. The analysts surveyed by Zacks had expected revenue of $52.09 billion.