Apple iPhone sales dropped by 17% in the three months to the end of March.
The California-based tech giant reported a drop in revenue from the iPhone to $31 billion for the quarter.
However, the company noted that sales picked up towards the end of March, including in China, where Apple recently slashed prices to boost demand.Earlier this year the company warned that sales in China would slow down – a highly competitive market with local rivals such as Huawei and Xiaomi offering cheaper alternatives.
In total, the company posted quarterly revenue of $58 billion, a 5 percent drop compared to the year-ago quarter. Second quarter profits dropped to $11.5 billion from the $13.8 billion it reported in the same period a year ago.
“Our March quarter results show the continued strength of our installed base of over 1.4 billion active devices, as we set an all-time record for Services, and the strong momentum of our Wearables, Home and Accessories category, which set a new March quarter record,” said Tim Cook, Apple’s CEO.
“We delivered our strongest iPad growth in six years, and we are as excited as ever about our pipeline of innovative hardware, software and services. We’re looking forward to sharing more with developers and customers at Apple’s 30th annual Worldwide Developers Conference in June.”
“We generated operating cash flow of $11.2 billion in the March quarter and continued to make significant investments in all areas of our business,” said Luca Maestri, Apple’s CFO.
“We also returned over $27 billion to shareholders through share repurchases and dividends. Given our confidence in Apple’s future and the value we see in our stock, our Board has authorized an additional $75 billion for share repurchases. We are also raising our quarterly dividend for the seventh time in less than seven years.”
Apple provided the following guidance for the third quarter:
- revenue between $52.5 billion and $54.5 billion
- gross margin between 37 percent and 38 percent
- operating expenses between $8.7 billion and $8.8 billion
- other income/(expense) of $250 million tax rate of approximately 16.5 percent
Shares in the company rose by as much as 5% after the better-than-expected third-quarter projections.