To The Moon

$苹果(AAPL)$ Apple's Q2FY2024 revenue and EPS slightly exceeded Wall Street expectations, with revenue down 4.3% year-over-year, and iPhone sales revenue declining by 10.5%. The company announced its largest-ever $110 billion share buyback plan, which boosted the stock price significantly after hours. The upcoming iPad event next week and the June developer conference may include significant AI-related announcements.

Key metrics:

- Earnings Per Share (EPS): $1.53, better-than-expected $1.50

- Revenue: $90.75 billion, exceeding the expected $90.01 billion

- iPhone Revenue: $45.96 billion, slightly below the expected $46 billion

- Services Revenue: $23.9 billion, surpassing the expected $23.27 billion

- Gross Margin: 46.6%, meeting expectations

Apple's second-quarter revenue declined by 4.3% to $90.75 billion, with the following highlights:

• iPhone revenue declined by 10.5% to $45.96 billion, slightly below the expected $46 billion.

• Mac revenue increased by 3.9% to $7.451 billion, beating the market's expected decline of 5%.

• iPad revenue declined by 16.7% to $5.56 billion, falling short of the expected $5.9 billion. The lack of new iPad releases since 2022 has impacted sales.

• Wearables, Home, and Accessories revenue declined by 9.6% to $7.913 billion, greater than the expected 5% decline.

• Services revenue increased by 14.2% to $23.87 billion, surpassing the expected $23.28 billion, reaching a new high for the fifth consecutive quarter. Future service revenue is expected to maintain double-digit growth.

  

Apple's Q2FY2024 net income was $23.64 billion, down 2.2% year-over-year. However, the EPS of $1.53 exceeded the expected $1.50 and the previous year's $1.52, mainly due to the company's long-term massive share buybacks enhancing EPS.

Additionally, Apple has raised its quarterly dividend for the twelfth consecutive year, increasing it by 4% to $0.25 per share.

Apple did not provide guidance for the next quarter, but Cook stated that total revenue for the June quarter may see a low single-digit percentage increase (market expectations of 1.75% year-over-year growth). Services and iPad revenue are expected to see double-digit growth, and the long-term prospects for the Greater China region remain positive (FYQ2 revenue in Greater China declined by 8% year-over-year, better than expected). iPhone sales are recovering in the mainland Chinese market.

Cook also said Apple has “big plans to announce” from an “AI point of view” during its iPad event next week and at the company’s annual developer conference in June.  

Overall, Apple has been one of the weakest performing tech stocks this year, alongside Tesla. While market sentiment was generally pessimistic beforehand, the earnings report met expectations. The continuous buyback of shares has increased EPS and shareholder returns. Apple's stock price rebounded after hours similar to Tesla, driven more by future expectations, with anticipation for the AI plans in June.