Apple's services revenue surges 31% in Q2

Apple's services revenue surges 31% in Q2

Apple's services revenue surges 31% in Q2

Other large investors have also recently added to or reduced their stakes in the company. The company did not provide a timeline for the repurchases.

The company, flush with a huge cash pile on strong earnings boosted by the USA tax cut plan of 2017, also announced a 16% boost to its quarterly dividend. Share buybacks, which are reaching record levels, are great for investors, including executives and employees, because they reliably lift stock prices by limiting the supply of shares forsale.

But critics say the actions can take money away from potential investments in hiring or research and development, and can increase economic inequality because they typically benefit wealthier people. "It's nothing but a manipulation of the stock market".

"I'd hoped for more on the dividend side or maybe a strategic investment", said Hal Eddins, chief economist for Apple shareholder Capital Investment Counsel.

It's unlikely that Cook would have admitted to any weakness during Apple's earnings call anyway, though he might have avoided mentioning its sales had the device been considered a failure: Of the Homepod, widely considered a costly flop, Cook only said the device "is a breakthrough speaker that delivers unbelievable sound, and we believe it will change the way people listen to music at home". Institutional investors and hedge funds own 61.18% of the company's stock.

Apple announced its second-quarter earnings of fiscal 2018 late Tuesday, edging above consensus analysts' estimates.

In its quarterly report on Tuesday, Apple said it would earmark $100 billion for a new share repurchase program, succeeding a $210 billion buyback program that started in 2012 and will wrap up this quarter - roughly nine months ahead of schedule.

In March, Senator Tammy Baldwin introduced legislation that would restrict companies' ability to buy back stock, though the Bill has little chance of passing.

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Not even Apple can avoid the drop in sales before the announcement of a new lineup of devices given its predictable release cycle. Apple first introduced 3D Touch with the iPhone 6S in 2015, and at the time most of the reviews raved about the feature.

Apple said it had sold 52.2 million iPhones during the first three months of the year.

IPhone sales in total are up almost three percent from the same time a year ago. "The iPhone X is a beloved product", Apple CEO Tim Cook said on a post-earnings conference call with analysts. As for the other numbers, Apple revealed that it sold over 52 million iPhones and in the process generated $38.03 billion in revenue. iPhones constituted of nearly 62% of Apple's revenues. In the last quarter, insiders have sold 125,988 shares of company stock worth $21,336,201. It's highly profitable, and Apple has managed to raise the average price of the iPhone.

In fact, it's worth noting that global sales accounted for 65 per cent of Apple's revenue during the quarter.

"I don't buy the view that market's saturated", he said.

Apple Inc. shares rose $6.26 (+3.70%) in premarket trading Wednesday.

So, in summary: Apple has a potentially great future business in wearables, it has an wonderful current business with iPhones, and it has a nice steady recurring revenue business with services.

Apple bought US$23.5 billion of stock in the March quarter, and said it planned to hike its dividend 16 per cent, compared with a 10.5 per cent increase previous year.

"Services sales growth of 31 percent Y/Y was robust this quarter, and well above expectations, reflecting broad strength across Apple's offerings, including App Store, Apple Music, iCloud and Apple Pay", Deutsche Bank analyst Sherri Scribner said. The company now has 270 million paid subscribers across applications and its own services, up by 100 million from the same period a year ago.

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