Apple on Tuesday reported quarterly results below Wall Street targets and forecast another disappointing quarter, while sales of iPhones, its most important product, declined for the first time.
Apple also said it was raising its capital return program by $50 billion through a $35 billion increase in its share buyback authorization and a 10 percent rise in the quarterly dividend.
Apple said it sold 51.2 million iPhones in its second fiscal quarter, down from 61.2 million in the same quarter a year ago but above analysts’ estimates of about 50 million devices.
But earnings of $1.90 per share fell short of the average analyst estimate of $2 per share, according to Thomson Reuters I/B/E/S. Revenue of $50.56 billion missed expectations of $51.97 billion.
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Apple forecast third-quarter revenue of $41 billion to $43 billion, short of the Wall Street consensus of $47.3 billion.
While Apple executives had predicted iPhone sales would decline this quarter, they must reassure investors that the drop represents a momentary roadblock for the company, rather than a permanent shift for the product that fueled its meteoric rise.
After years of blockbuster sales, many investors fear that the iPhone has reached a point of saturation, spelling the end for Apple’s era of exponential growth.
The company has yet to present another device that can drive sales on that order, though last year it released the Apple Watch, its first new product without legendary co-founder Steve Jobs at the helm.
Rather than buying the iPhone 6S and 6S Plus, many consumers are waiting for the release of the expected iPhone 7 later this year to upgrade their phones, according to analysts.
Apple had planned to release its quarterly results on Monday but delayed the event by a day due to the memorial service for Bill Campbell, a longtime Apple board member who mentored many prominent executives in Silicon Valley.