Apple’s stock price increases as sales decline less than expected, despite drop in China revenue

Apple shares rose on Thursday after it surpassed analysts’ downbeat expectations for revenue in the first three months of 2024 as it navigates lower sales in China compared with the prior year. The tech company reported revenue of $90.75bn in the past quarter, down 4 per cent from the year before but slightly ahead of consensus estimates for $90.3bn. Apple also announced another $110bn in share buybacks and raised its quarterly dividend by 4 per cent.

Services revenue, which includes the App Store, Apple TV, and Apple Pay, saw strong growth, up 14 per cent to a record $23.9bn. However, revenue from its best-known product, the iPhone, was down to $46bn from $51.3bn the previous year. Despite this, diluted earnings per share were $1.53, slightly above consensus estimates.

Shares of Apple bounced more than 7 per cent higher in after-hours trading, signaling investor confidence in the company’s future growth prospects. Gene Munster at Deepwater Asset Management noted that the stock is up because the business is holding together and setting up for accelerating growth over the next three quarters.

Apple’s rocky start to the year, including the cancellation of its car project and slipping iPhone sales in China, has not deterred the company’s confidence. Chief financial officer Luca Maestri expressed optimism about the company’s future, citing strong iPhone sales in China and a busy period ahead with new product launches.

Analysts are hopeful that Apple can boost sales by announcing generative artificial intelligence features, potentially at its developers’ conference in June. With pressure from regulators on both sides of the Atlantic, Apple is looking to innovate and stay ahead in the competitive tech market.