According to CFO Luca Maestri, "The iPhone is truly a global product, and we're doing well in emerging markets right now."
Apple (AAPL) recorded an unexpected increase in iPhone sales as well as outstanding sales in a number of emerging regions on Friday, all of which helped the tech titan post a stronger-than-expected second quarter earnings report.
The sale of expensive iPhone Pro models, which were in high demand over the holiday season, contributed to the 1.5% increase in iPhone sales from the previous year to $51.33 billion.
This improvement helped to lift profitability for the three months ending in March to $1.52 a share, a figure that above Wall Street expectations by 9 cents. It also helped to overcome reductions in Mac and iPad sales as well as a 3% decline in China's revenue.
At $94.84 billion, group revenues were still down 2.5% from a year ago, marking the second straight sequential loss. CFO Luca Maestri predicted that this pace of reduction would likely continue into the June quarter, despite the fact that gross margins would probably increase to between 44% and 44.5%.
"The iPhone is truly a global product, and we're doing well in emerging markets right now," Maestri said on a conference call with investors late on Thursday. That has assisted us in overcoming some macroeconomic difficulties.
Apple's recent push into India, which included the opening of its first retail stores in the Android-dominated market last month, led to record March quarter revenues, estimated at $6 billion. At the same time, markets in Mexico, Indonesia, and the Philippines also registered record high sales levels, as Apple's installed base of devices surpassed 2 billion worldwide.
According to KeyBanc Capital Markets analyst Brandon Nispel, who has a "overweight" rating and a $180 price target on Apple stock, "records are being set on the installed base of active devices across all geographies and all product categories, so we believe investors are likely to continue to look past the noise of quarterly results."
Early Friday trading saw Apple shares rise 4.6 percent to trade at $173.54 per, bringing the stock's year-to-date gain to around 39%.
Apple's core services division, which includes Apple Pay, iCloud, and Apple TV, saw a 5.5% increase in revenue to $20.91 billion.
As predicted, hardware sales were weak: Apple said that Mac sales were down 31% from last year to $7.17 billion, while iPad sales were down 13% to $6.67 billion. Apple Watch sales among other wearables saw a 0.6% decline to $8.76 billion.
"Services revenues missed the consensus forecast, but the App Store, Apple Music, iCloud, and payment services all set quarterly revenue records, and the company has nearly a billion paid subscriptions," said Scott Kessler, Third Bridge's global sector lead for technology, media, and telecommunications. "Experts have continued to tell us that financial and payment services can propel Apple's growth for years to come."
While still declining, China's sales increased from the 7% decline seen over the December quarter as the nation quickly removed its COVID-era limitations.
Apple also announced that it would increase its dividend by one penny to 24 cents per share, marking the eleventh straight yearly increase and permitted a new $90 billion share buyback. With a distribution date of May 18, the dividend will be available to stockholders of record on May 15.
Apple's Unexpected IPhone Sales Growth In Emerging Markets