Robust iPhone sales drive Apple’s Q2 revenues past expectations

Apple’s (AAPL) revenues increased sharply in the second quarter supported by strong performance by iPhone, amidst increasing concerns over the recent slump in the sales of the iconic gadget. The top line exceeded market expectations, triggering a stock rally in the after-hours Tuesday.

During the quarter, the tech giant sold around 52 million iPhones, up 3% compared to last year. Meanwhile, reflecting the renewed focus on services, that segment registered a 31% growth during the three-month period. Sales of iPhone climbed 14% to $38 billion, lifting overall revenues by 16% to $61.1 billion.

Driving the upturn, the main geographical segments registered double-digit growth, with revenues from the Americas and China rising 17% and 21% respectively. Japan witnessed a 22% growth, and revenues from Europe moved up 9%.

The company reported a 30% growth in second-quarter earnings to $2.73 per share, after registering record profit and revenues in the preceding quarter.

“Customers chose iPhone X more than any other iPhone each week in the March quarter, just as they did following its launch in the December quarter. We also grew revenue in all of our geographic segments, with over 20% growth in Greater China and Japan,” said Apple CEO Tim Cook.

Encouraged by the increased flexibility in repatriating cash from abroad, pursuant to the recent tax reform, Apple announced a $100-billion share repurchase program and a 16% hike in quarterly dividend.

Looking ahead, the company expects to generate revenue in the range of $51.5 billion to $53.5 billion in the third quarter. Gross margin is forecasted between 38 % and 38.5% for the quarter, and operating expenses in the range of $7.7 billion to $7.8 billion.

Casting doubts over the future of iPhone, last month a Taiwanese firm supplying components to Apple had reported piling up of inventory that was meant for iPhone X, and cautioned that demand for the smartphone is shrinking. Corroborating the report, Samsung, which supplies OLED screens to Apple, later made a similar disclosure.

Apple’s shares gained more than 5% following the earnings report, which was one of the most eagerly-awaited announcements from the company in recent times. The stock witnessed a 2.5% decline so far this year, marking the steepest fall in nearly two years.