Post-Earnings report revealed Apple’s Q2 earnings better-than-expected results and its largest-ever stock buyback plan, leading to a 6% increase in premarket trading.
Apple’s Q2 2024 Earnings Surpass Wall Street Estimates
- Earnings per share (EPS) of $1.53, surpassing consensus projection of $1.50.
- Total revenue reached $90.75 billion, compared to $90.01 billion.
- iPhone revenue slightly declined to $45.96 billion, compared to $46.00 billion forecast.
- 4% slump in overall sales and nearly 10% drop in iPhone sales year-over-year due to challenging comparisons.
- CEO Tim Cook expects low single-digit sales growth for June quarter.
- Apple announced a record $110 billion share buyback program, marking a 22% increase from last year’s $90 billion.
- Apple stock rose after-hours following the news.
- Apple will pay a dividend of 25 cents per share, a 1-cent increase from the previous dividend.
What are the Banks Say about it
Oppenheimer
“Apple’s $110B Buyback Adds Constructive China Comment”
- Adds to positive China outlook.
- Delivers solid results despite tough macro backdrop.
- Reiterates outperform.
Bank of America
Bank of America’s Buy Upgrade to Apple:
- Strong multi-year iPhone upgrade cycle driven by GenAI.
- Reaccelerating services growth.
- Emphasis on Apple silicon across iPhone, Mac, Servers.
- Continued strong capital returns.
- Upside to General Managers (Services was 74.6%).
- Incentive for institutional clients to increase positions in anticipation of AI features.
Barclays
Barclays’ Market Analysis:
- Shares rallied due to June-Q guide matching Street consensus.
- China revenues were better than expected.
- Growth headwinds include China pressure, iPhone share losses, and lack of new features for IP16/AI.
- Mar-Q saw Apple deliver in-line revenue, but product GM missed by 100bps.
- Higher memory prices and possibly negative mix shift for iPhones may impact performance.
Evercore ISI
Evercore ISI’s Market Outlook:
- Stock expected to rise due to easier comparisons and increased catalysts.
- AAPL’s capital efficiency in AI execution compared to other tech companies.
- Positive catalysts expected post-June-qtr guide.
- WWDC expected to reveal AAPL’s AI strategy.
- Apple’s AI potential without additional capex.
Wells Fargo
Wells Fargo’s Analysis:
- AAPL’s F2Q24 results and F3Q23 guide seen as positive.
- Apple’s upcoming AI announcements could be a catalyst.
- Apple’s strategy includes smaller models, partnerships, and on-device optimization.
- Despite recent gains, Apple stock remains -10%, underperforming the broader market.