Apple Posts $23.6B Profit, Announces Record $110B Buyback Amid China Challenges

Apple reports $23.6 billion profit in Q1 2024, beating Wall Street expectations despite 10% drop in iPhone sales in Greater China. The company announces a record $110 billion share buyback and raises its quarterly dividend to $0.25 per share.

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Apple Posts $23.6B Profit, Announces Record $110B Buyback Amid China Challenges

Apple Posts $23.6B Profit, Announces Record $110B Buyback Amid China Challenges

Apple Inc. has reported a profit of $23.6 billion in the first quarter of 2024, beating Wall Street's expectations despite a 10% drop in iPhone sales in the Greater China market. The tech giant's earnings per share of $1.53 surpassed forecasts of $1.51, while its revenue of $90.8 billion topped estimates of $90.4 billion.

Although iPhone sales in the Greater China region declined by 10% to $16.3 billion compared to the same period last year, Apple's CFO Luca Maestri stated that iPhone sales in China are still strong, with the number of active Apple devices at an "all-time high". The company reported $46 billion in revenue from iPhone sales, in line with forecasts.

Why this matters: Apple's ability to maintain profitability despite challenges in the Chinese market has significant implications for the global tech industry, as it sets a precedent for other companies facing similar issues. Additionally, Apple's commitment to share buybacks and dividend increases may influence investor sentiment and Apple's ability to maintain profitability despite challenges in the Chinese market has significant implications for the global tech industry, as it sets a precedent for other companies dealing with similar issues. Additionally, Apple's commitment to share buybacks and dividend increases may influence investor sentiment and have a ripple effect on the broader stock market.

Apple's services segment, which includes the App Store, Apple TV, and Apple Pay, saw a 14% growth to a record $23.9 billion, beating analyst estimates of $23.1 billion. The company also announced a massive $110 billion share buyback, its highest repurchasing effort ever, to reverse dilution and boost share value.

Other key highlights from Apple's Q1 2024 earnings report include a 4% increase in Mac sales to $7.5 billion, a 17% decrease in iPad revenue to $5.6 billion, and $7.91 billion in revenue from the Wearables, Home, and Accessories category. The company also raised its quarterly dividend to $0.25 per share.

Following the earnings release, Apple's stock surged 5%, building on its 3% gain during regular hours and trading at its highest level since February. However, the company's share price has underperformed the tech-heavy Nasdaq Composite index, with a 7% loss year-to-date.

Despite its strong financial performance, Apple faces challenges in the Chinese market as a result of increased competition, nationalism, and a rough economy. Chinese manufacturers, including Huawei and Xiaomi, have made notable gains as consumers turn to national brands. However, CEO Tim Cook said iPhone sales are up in mainland China in the latest quarter.

Key Takeaways

  • Apple reports $23.6 billion profit, beating Wall Street expectations.
  • iPhone sales in Greater China drop 10%, but overall iPhone revenue meets forecasts.
  • Services segment grows 14% to $23.9 billion, a record high.
  • Apple announces $110 billion share buyback, its largest ever.
  • Stock surges 5% after earnings release, despite year-to-date loss of 7%.