Apple beats Q2 estimates as iPhone sales decline 10%

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Apple (AAPL) reported second quarter results Thursday that showed sales fell less than feared during the quarter while profits topped estimates, sending shares up as much as 4% in extended trading. Apple's Greater China revenue, which includes mainland China, Taiwan, Singapore, and Hong Kong, slid 8% year over year to $16.37 billion. That, however, was better than the $15.87 billion analysts were expecting. The company's all-important iPhone revenue topped out at $45.96 billion, down from $51.33 billion in Q2 last year. Overall, Apple reported earnings per share (EPS) of $1.53 on revenue of $90.8 billion. Wall Street was anticipating EPS of $1.50 on revenue of $90.3 billion, according to analyst estimates compiled by Bloomberg. The company also announced it was authorizing an additional $110 billion for share repurchases and increased its dividend to $0.25 per share. Apple is dealing with a one-two combination of a resurgent Huawei and a slowing economy in China, which is cutting into its sales. Still, Apple CFO Luca Maestri told Yahoo Finance's Josh Lipton that the company saw growth in mainland China. The company's stock is off some 10% year to date and 2% over the last 12 months. Shares of Big Tech rivals like Microsoft (MSFT) and Google (GOOG, GOOGL), meanwhile, are up 30% and 58% over the last year, respectively. Mac revenue came in at $7.45 billion versus an anticipated $6.79 billion, while iPad revenue hit $5.55 billion. Analysts were expecting $5.91 billion. Wearables, which includes AirPods, the Apple Watch, and Vision Pro, saw revenue of $7.91. Wall Street was looking for $8.28 billion. But there was one bright spot for Apple in the quarter: Services revenue hit $23.87 billion, up from $20.91 billion last year, an all-time record. Analysts were expecting $23.28 billion. Apple is also gearing up for its Worldwide Developers Conference (WWDC) in June, where it will reportedly unveil the latest versions of its iOS, macOS, watchOS, iPadOS, and visionOS operating systems. One of the biggest announcements at the show will likely be how Apple will integrate generative AI into its various products. The company is late to the generative AI party, with rivals across Big Tech already rolling out their own product offerings to consumers and enterprise customers. But that doesn’t mean Apple has been twiddling its thumbs. The company has been busy buying up AI firms and building its own large language model to potentially power its AI efforts. And Maestri told Yahoo Finance that the company is making significant investments in generative AI technologies. Story continues Apple is also looking to work with OpenAI, Google, and others to get its AI offerings up to snuff, according to Bloomberg's Mark Gurman. Generative AI is still a relatively niche product among consumers. Sure, Google and Samsung offer generative AI capabilities on their smartphones, and PC makers are increasingly leaning into so-called AI PCs, but the applications still feel largely like tech demos rather than game-changing features that will significantly drive sales. Apple has the opportunity to change that. Subscribe to the Yahoo Finance Tech newsletter. (Yahoo Finance) Update: This article has been updated to reflect a change in Apple's Greater China revenue estimates. Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley. For the latest earnings reports and analysis, earnings whispers and expectations, and company earnings news, click here. Read the latest financial and business news from Yahoo Finance.