Apple posts surprise fall in iPhone sales

Disappointing iPhone sales pressured Apple stock after hours. Earlier, tech and industrial stocks helped lift the markets.VIDEO: REUTERS
WhatsApp and Facebook messenger icons are seen on an iPhone in Manchester, Britain.
WhatsApp and Facebook messenger icons are seen on an iPhone in Manchester, Britain.PHOTO: REUTERS

NEW YORK (REUTERS) - Apple reported a surprise fall in iPhone sales for the second quarter on Tuesday (May 2), indicating that customers had held back purchases in anticipation of the 10th-anniversary edition launch of the company's most important product.

Shares of the world's most valuable listed company were down 1.2 per cent at US$145.78 in after-hours trading.

The company boosted its capital return programme by US$50 billion (S$70 billion), increasing its share repurchase authorisation by US$35 billion and raising its quarterly dividend by 10.5 per cent.

Apple sold 50.76 million iPhones in its fiscal second quarter ended April 1, down from 51.19 million a year earlier.

Analysts on average had estimated iPhone sales of 52.27 million, according to financial data and analytics firm FactSet.

However, revenue from the smartphones rose 1.2 per cent in the quarter.

Expectations are building ahead of Apple's 10th-anniversary iPhone range this fall, with investors hoping that the launch would help bolster sales.

Apple typically launches its new iPhones in September.

A big jump in sales usually follows in the holiday quarter, before demand tapers over the next few quarters as customers hold back ahead of the next launch.

Apple's 10th-anniversary iPhone range might sport features such as wireless charging, 3-D facial recognition and a curved display.

The company forecast total revenue of between U$43.5 billion and US$45.5 billion for the current quarter, while analysts on average were expecting US$45.60 billion, according to Thomson Reuters I/B/E/S.

Analysts on average expect the company to sell 42.31 million iPhones in the current quarter, according to FactSet.

The company's net income rose to US$11.03 billion, or US$2.10 per share, in the second quarter, from US$10.52 billion, or US$1.90 per share, a year earlier.

Analysts on average had expected US$2.02 per share, according to Thomson Reuters I/B/E/S.

Revenue rose 4.6 per cent to US$52.90 billion in the quarter, compared with analysts' average estimate of US$53.02 billion.

Apple's revenue from the Greater China region fell 14.1 per cent to US$10.73 billion in the quarter, as cheaper rivals in the region chip away at sales.

A 17.5 per cent jump in the company's services business - which includes the App Store, Apple Pay and iCloud - to US$7.04 billion boosted revenue.