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Apple reported its earnings for Q2 2023 today, beating both Wall Street’s and its own dour revenue estimates just a bit but continuing to show marked declines in new hardware sales.
Overall sales revenue was $94.8 billion for Apple’s financial quarter ending April 1 (PDF), down 3 percent year over year, short of the 5 percent Apple’s data had suggested in January. CEO Tim Cook emphasized Apple’s “all-time record in Services” and a record iPhone month in March, despite a “challenging macroeconomic environment,” in a press release. Services, which includes the App Store, AppleCare, iCloud, and Apple’s subscription products, increased to $20.9 billion in Q2, up about 5.5 percent.
iPhone sales increased 1.5 percent to $51.03 billion. Cook told CNBC’s Steve Kovach that “it was quite a good quarter from an iPhone point of view, particularly relative to the market when you look at the market stats.”
Still, Apple did not escape the slumps facing nearly all PC and smartphone makers, as every other hardware category saw declines. Macs dropped a precipitous 31.3 percent, beating even Apple’s 25 percent drop projection. iPads fell 16.8 percent to $6.7 billion (Apple had suggested 12 percent), and its wearables, home products, and accessories sales faltered a slight 0.6 percent. Net sales, including services, were down roughly 2.6 percent. Analysts expect tough numbers on new hardware to continue, as likely customers who stocked up during the pandemic now face high inflation and recession concerns.
Cook told CNBC that “the macro situation in general,” and comparing this year’s quarter to last year when Apple’s new M1-powered MacBook Pros were newly available, fed into the downward sales trend.
Net income from sales in Q2 was $24.16 billion versus $25.01 billion last year. Sales fell in most global regions, though they grew in “Asia Pacific” to $8.11 billion. India, Cook told CNBC, looks “very good” for capturing first-time iPhone buyers and those switching from Android.
Despite the down quarter, Apple continued buying back stocks and paying dividends with its considerable cash pile. Apple had spent more than $572 billion buying back stocks from 2012 through 2022. Thursday’s report showed Apple’s board authorizing $90 billion in buybacks and dividends.
