Business

Apple’s revenue weighed down by falling China sales

Tech giant announces $110bn in share buybacks and raises quarterly dividend by 4%

Apple’s revenue fell 4 per cent in the first three months of 2024, narrowly beating analyst expectations for a bigger decline, as sales in China continued to slow

Michael Acton
Thu May 2 2024 - 21:51

Apple’s revenue fell 4 per cent in the first three months of 2024, narrowly beating analyst expectations for a bigger decline, as sales in China continued to slow.

The tech company on Thursday announced revenue of $90.75 billion (€84.61), compared with consensus estimates of $90.3 billion. Apple also announced another $110 billion in share buy-backs and raised its quarterly dividend by 4 per cent.

Diluted earnings per share were $1.53, compared with consensus estimates of $1.50, down from $1.52 last year.

Services revenue – which includes the App Store, Apple TV and Apple Pay – once again saw strong growth, up 14 per cent to a record $23.8 billion.

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Apple shares were 3 per cent higher in after-hours trading. So far this year its stock has fallen about 7 per cent, and it has once again lost its position as the world’s most valuable listed company to Microsoft.

The company has had a rocky start to the year, with the cancellation of its years-long car project, mounting pressure from US and European Union antitrust enforcers and slipping iPhone sales in China.

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Net sales in the greater China region were $16.3 billion for the quarter, compared with $17.8 billion a year ago.

There have been warning signs about its China business. A report from Counterpoint Research last month said that iPhone sales in the country fell 19 per cent year on year in the first three months of the year, while market researcher International Data Corporation reported that the company lost its lead in the global smartphone market to Samsung as Chinese rivals such as Xiaomi and Huawei made gains as the wider market rebounded.

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Apple chief financial officer Luca Maestri said iPhone sales were still strong in China, despite it being “the most competitive smartphone market in the world”, with the number of active Apple devices at an “all-time high”.

The $110 billion share buyback showed that “we feel very good about the status of the company, [and] we have great confidence in what we have in store for our customers”, Mr Maestri said, adding that “a very busy period” was coming in terms of new products.

Apple has also come under intense pressure from regulators on both sides of the Atlantic. The US department of justice brought an antitrust lawsuit against the tech giant in March.

That same month, the EU opened an investigation over Apple’s potential failure to comply with the Digital Markets Act. It also fined Apple €1.8 billion over the rules it applies to rival music streaming services on its App Store.

Analysts are hopeful that Apple can boost sales of its smartphones and laptops by announcing long-anticipated generative artificial intelligence features, potentially at its developers’ conference in June. Chief executive Tim Cook has promised to share details of the company’s work in the AI space later this year.

“We’re very bullish about our opportunity in generative AI,” Mr Maestri said. – Copyright The Financial Times Limited 2024

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