Apple reports surprise decline in iPhone sales

Apple shares fell in late trading yesterday as it reported a surprise fall in iPhone sales for the second quarter, indicating that customers had held back purchases in anticipation of the 10th-anniversary edition launch of its most important product.

The company boosted its capital return program by $50bn, increasing its share repurchase authorisation by $35bon and raising its quarterly dividend by 10.5%.

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

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

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 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 $43.5bn and $45.5bn for the current quarter, while analysts on average were expecting $45.6bn.

Analysts expect the company to sell 42.31m iPhones in the current quarter, according to FactSet.

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

Analysts had expected $2.02 per share.

Revenue rose 4.6%to $52.90bn in the quarter, compared with analysts’ average estimate of $53.02bn.

A 17.5% increase in the company’s services business —which includes the App Store, Apple Pay, and iCloud — to $7.04bn boosted revenue.