(Reuters) – Apple Inc on Tuesday forecast stronger-than-expected third quarter earnings and chief executive Tim Cook said iPhone sales start to stabilize in China, a sign that the decline in prices of Apple, there is helps reduce sales abroad.
FILE PHOTO: 3D print Apple, the logo is visible in front of the stock is displayed graph in the figure adopted April 28, 2016 REUTERS / Dado Ruvic / Illustration
IPhone sales marked their steepest decline ever, falling by 17 percent in the fiscal second quarter compared with a year earlier, and little short of analysts expectations. But Apple executives said pick-up iPhone sales to the end of the second quarter, with the increase of the & # 39; service sales and handheld devices, has made them optimistic about this quarter.
Shares rose more than 5 percent to $ 211.50 after-hours trading after Apple announced the results.
Apple's, expects revenue between $ 52.5 billion and $ 54.5 billion for the current quarter ending in June, above the average analyst estimates in $ 51.93 billion, according to IBES Refinitiv.
In an interview with & # 39; u Apple CEO Tim Cook said iPhone sales began to strengthen over the last few weeks of the second fiscal quarter.
"When we look at the results of the iPhone through Q2, the results were more based on year on year over the last few weeks of the quarter. We also saw a similar effect in China, "said in an interview with & # 39; nd Cook Reuters. "They, along with the continuing success with wear and so on, give us some confidence that the situation is getting a little better."
Apple's, reported net earnings per share of $ 2.46 for the March quarter, compared with an average estimate of Wall Street at $ 2.36.
Apple's, said, iPhone revenues were $ 31.05 billion, slightly below analysts' estimates at $ 31.10 billion, according to FactSet.
service revenues, which includes sales of the Apple Music, the App Store and other businesses, reached $ 11450000000, compared with analysts' estimates of $ 11320000000, according to FactSet.
Apple's, struggled with slowing sales of the iPhone in key markets such as China and saw its first year over year decline in iPhone revenues for the holiday shopping season.
The slowdown stems partly from the high price of the iPhone and competition from rivals such as Huawei Technologies Co Ltd, Xiaomi Corp, Oppo and Vivo – all of which sell cheaper phones with features similar to the iPhone.
But Cook said the price adjustment in China, together with lower taxes on Chinese iPhone and trade and financial transactions of Apple's, suggested and helped iPhone sales start to recover until the end of the quarter. Cook also said he was "optimistic" that the United States and China will soon reach trade agreements.
"Trade relations, compared with the previous quarter, the better. The tone is better, "said Cook Reuters. "The sum of all this together, it helped us."
Investors are looking for business-services company Apple's, to stimulate growth, the iPhone sales are slow. Last month, Apple revealed new credit cards that offer services and subscriptions to news, television and computer games, although the only news subscription is currently available for purchase.
Apple's, said Tuesday that 390 million total subscribers of both their own and other services on their devices. The company has set a goal of 500 million until 2020.
Apple's, also beat analysts' expectations of their business wear, resulting in sales of $ 5130000000, compared with estimates of $ 4790000000, according to FactSet.
For the second fiscal quarter ended in March, Apple reported revenue of $ 58020000000, above the average analyst estimate of $ 57370000000, according Refinitiv.
Apple's, also said that its board has authorized an additional $ 75 billion share buyback and increased dividend of 5 per cent. Apple's, said it spent $ 27 billion on share buybacks and dividends during the fiscal second quarter, that & # 39 is a record for the company.
Reporting Stephen Nellis in San Francisco; Editing Lisa Shumaker