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Apple jumps as investors cheer earnings results – uptrend continues

The bull market in Apple's stock will likely continue as the company another solid quarterly earnings results.

The Apple stock price jumped notably during the pre-market trading on Friday as investors continued to be happy about the company’s past and future endeavors.

Bottom and top lines were beyond projections

When Apple reported its second-quarter earnings on Thursday afternoon, its revenue and earnings per share (EPS) were higher than expected.

In the second quarter, the technology company posted net sales of $94.84 billion, down 2.5% year over year. However, the iPhone manufacturer outperformed the $92.96 billion in sales predicted by Refinitiv for the second quarter. Apple also surpassed forecasts for diluted earnings per share. At $1.52, it was 9 cents higher than forecasts and on par with the second quarter of 2022.

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Apple’s CEO Tim Cook blamed the “challenging macroeconomic environment” for the company’s two consecutive quarterly sales declines for the first time in four years and just the third time in a decade.

The iPhone’s strong performance contributed to a 1.5% increase in Apple’s bottom line. However, Apple saw a decline in profits of almost 30% from Mac computers and 13% from iPad tablets.

The company’s wristwatch and AirPod headphones are just two examples of its wearables and accessories sector, which also saw a modest decline. On the other hand, Apple’s booming services segment, including the App Store and iCloud, increased by 5%.

After losing $25.3 billion in the same quarter the previous year, Apple’s investing operations reported a gain of $874 million on its cash flow statement. With operational expenditures increased by around $1 billion compared to the same quarter a year ago, this was a windfall to the company’s financials in the second quarter. Apple is likewise not following the lead of other computer titans by reducing its workforce.

“We generated strong operating cash flow of $28.6 billion while returning over $23 billion to shareholders during the quarter,” Apple CFO Luca Maestri stated.

Along with the additional $90 billion in share repurchases, he also announced a 4% increase in the company’s dividend to $0.24 per share. The “buyback king” has spent $572 billion repurchasing its own shares since 2012, whereas Alphabet has only spent $178.5 billion on stock buybacks.

No mentions of AI

Cook answered a question regarding artificial intelligence (AI) during the company’s results call with analysts and investors. He stated that Apple does not discuss its future product plans and that it is “important to be deliberate and thoughtful in how you approach these things.”

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He said there were “several issues that need to be sorted as is being talked about in a number of different places,” but he also said the “potential” was “certainly very interesting.”

Focus on India continues

In many countries spanning South Asia, Latin America, and the Middle East, Apple reported breaking sales records.

“We’re putting efforts in a number of these markets and really see, particularly given our low share and the dynamics of the demographics, a great opportunity for us in those markets,” Cook said to investors during a conference call, cited by Reuters.

For Apple, India is a top priority. Even though Apple does not provide sales for the nation, Cook told investors that it established a quarterly record and percentage growth was in solid double digits year over year after opening its first two retail shops there, in Mumbai and Delhi.

Apple daily chart

Apple daily chart, source: author´s analysis, tradingview.com

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