Apple Inc. (NASDAQ: $AAPL) is a leading designer, manufacturer, and marketer of smartphones, PCs, tablets, computer software, and peripherals. It is one of the most renowned brands worldwide, with a market cap of over $2.8 trillion.
On Thursday, May 2, 2024, after markets closed, Apple released its second quarter fiscal 2024 results to a positive market reception.
Apple Release Stellar Q2 Results
In the second quarter, Apple reported $90.8 billion in revenue, marketing a 4% YoY decline but exceeding forecasts of $90.01 billion. EPS came in at a record $1.53, surpassing estimates of $1.50, while net income came in at $23.64 billion, beating estimates of $23.18 billion.
As of the end of the second quarter, the company had $32.695 billion in cash and cash equivalents and $337.411 billion in total assets.
Performance Highlights
Apple’s Products segment saw a 9.53% decline in revenue to $66.89 billion. However, the Services segment saw revenue climb 14.16% to a new record high of 23.87 billion.
The 4% decline in total revenue from the quarter was driven by an 8.08% decline in Greater China sales to $16.37 billion. However, it was better than the predicted $15.3 billion. Its best-performing product was the iPhone, which brought in $45.96 billion in revenue, a 10.5% decline YoY.
Commenting on the results, CEO Tim Cook highlighted the company’s launch of the Apple Vision Pro. He also revealed that they plan to launch a new product next week and host the Worldwide Developers Conference in June.
Accelerated Capital Returns
Apple’s board has approved an additional $100 billion for share buybacks and issued quarterly dividends for 12 consecutive years. The board declared a $0.25 dividend per common stock, marking a 4% increase, payable to listed shareholders as of May 13, 2024.
Apple Stock Performance
AAPL stock closed trading on Thursday, May 2, 2.20% higher at $173.03 per share. Following the stellar Q2 results, the stock soared 6.22% during pre-market trading to $183.80 per share.
However, the stock has struggled in the past 52 weeks over fears of declining iPhone sales. As of Thursday’s closing price, the stock is up 11.21% over the past 52 weeks, underperforming the SPX, which has seen a 22.43% gain in the same period. Additionally, the stock has lost 2.01% of its value since the start of the year.
Short sellers hold 101.91M AAPL shares as of April 16, 2024, which is 0.66% of the floating shares and shares outstanding.
Analysts’ Outlook in AAPL
Stock analysts are cautiously optimistic about AAPL’s future performance. They give the stock an overall moderate buy rating, with a wide range of predictions. Ranging from a high of $250 and a low of $158, the analyst’s average forecast of $200.37 is a 15.80 upside from the last closing price.
Should You Buy Apple Stock?
Apple faces challenges, including competitive pressure, global economic uncertainty, and falling sales in China. However, the company’s strategic focus on its services business and continued innovation in the spatial computing space positions it well for the future. Its ability to maintain high profitability levels and a lucrative capital returns program highlight management’s ability to navigate any headwinds.
The Q2 results paint a picture of resilience and ability to navigate challenges. Amidst growth in the services segment, AAPL stock remains a lucrative option for investors seeking exposure to the consumer electronics industry.
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