Apple’s Q2 2017 Revenue Underwhelms at $52.9 Billion

Apple posted its results for the second quarter of fiscal year 2017, which left Wall Street slightly underwhelmed. Cupertino reported quarterly earnings of $52.9 billion with earnings per share clocking in at $2.10 in its latest quarter– below Wall Street’s expected earnings per share of $2.02 and $53.1 billion in revenue. Apple also stated that it sold 50.8 million iPhones, 8.92 million iPads, and 4.19 million Macs to the tune of $11.03 billion during this period.

“We are proud to report a strong March quarter, with revenue growth accelerating from the December quarter and continued robust demand for iPhone 7 Plus,” Cook said in a press release. “We’ve seen great customer response to both models of the new iPhone 7 (PRODUCT)RED Special Edition and we’re thrilled with the strong momentum of our Services business, with our highest revenue ever for a 13-week quarter.”

Apple Q2 Services Revenue

Apple also performed well in terms of its App Store and services revenue, raking in $7 billion compared to $6 billion from the second quarter of last year. During the quarterly conference call, Cook proudly reported that App Store revenue had grown 40% year-over-year, setting an all-time quarterly record, as well as double-digit revenue growth from Apple Music. Services provide a critical revenue stream to Apple as it seeks to diversify and offset stalling growth in other areas. As Cook is fond of noting, Apple’s services segment is on its way to becoming a Fortune 100 company.

Apple Q2 Product Sales

However, much of the focus was on sales of the iPhone, which is the company’s primary driver of growth and revenue. In that regard, Apple disappointed analysts, who had expected the company to sell 51.4 million units, up from 51.1 million units in the second quarter of last year. Instead, the iPhone 7 failed to stall decline and sales dipped slightly by around 1%, raising pressure on Apple to deliver on its iPhone 8. iPad sales also dropped significantly by 13% compared to last year, whereas Mac sales grew slightly by 4%. And as usual, the company refused to disclose figures about Apple Watch sales, which have been lumped in with others under the “Other Products” category.

All in all, however, Apple earned billions in revenue on the back of robust demand for the iPhone, as Apple CEO Tim Cook noted. The company’s stock has grown in leaps and bounds over the past year, making it one of the most valuable companies in the world by market cap and attracting significant investments from Warren Buffett.

 As such, Apple also announced that it would increase its program to return capital to shareholders. “We generated strong operating cash flow of $12.5 billion and returned over $10 billion to our investors in the March quarter,” said Apple CFO Luca Maestri. “Given the strength of our business and our confidence in our future, we are happy to announce another $50 billion increase to our capital return program today.”