Growth potential in India is phenomenal: Apple CEO Tim Cook

Apple shares soar despite 17% drop in iPhone revenue

Apple shares soar despite 17% drop in iPhone revenue

Apple Inc shares rose nearly 5 percent on Wednesday, pushing the iPhone maker's market valuation back towards $1 trillion (£764 billion) as its quarterly report and upbeat forecast calmed investors anxious about slowing growth. Revenues fell 5 percent to Dollars 58 billion in its fiscal second quarter to March, in line with the company's outlook, and earnings were down 10 percent to USD 2.46 per share. The company's services revenue has been a bright spot amid slowing iPhone sales.

The company said it would buy back an additional $75 billion worth of stock and increase its dividend 5 percent to $0.77 per share.

Sales of the iPhone, long the biggest driver of its business, fell 17% to about $44 billion - an accelerated decline for a product that has been hobbled by smartphone owners holding on to devices longer and by competition from rivals in China offering lower-price, feature-rich handsets. Apple's overall sales were down by 5 percent when compared to the same quarter a year ago, but that didn't seem to dissuade investors as the firm's stock still continued to rise. The company also predicts other other income/(expense) of $250 million and a tax rate of approximately 16.5 percent.

"We generated operating cash flow of $11.2 billion in the March quarter and continued to make significant investments in all areas of our business", said Luca Maestri, Apple's CFO.

"We believe Apple has locked up strong share of the premium tier market and will continue to dominate high-end smartphones sales and capture the vast majority of smartphone profits for the next several years", Canaccord Genuity analysts said.

Cook said the company has 390 million paid subscribers across its current services.

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CNBC: Apple stock as of May 1, 2019.

With the Apple Watch and the earphones AirPods, Apple is also now the most successful manufacturers of so-called Wearables.

Wednesday was a great day for Apple, as its shares surged by 6% to $213.97, which brought the market capitalization of the company to over $986. That's the reason why Apple shares surged even if its core product sales recorded a double-digit year-on-year fall. "Good move, and it gives the company another "in" with its customers with every service it rolls out".

Apple segment results - fiscal quarters shown. The corporation hopes to expand its services division by launching an upcoming streaming service, Apple TV+.

Credit: Qi Heng/VCG/GettyIn just one year, the iPhone went from accounting for 61% of Apple's revenue to 53.5%.

Before earnings call on Tuesday, Apple stock (aapl) had dropped 1.93%, closing at $200.67.

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