Apple Inc. (AAPL) announced its fiscal Q2 earnings on Thursday, reporting better-than-expected iPhone sales, while Mac and iPad sales fell short of estimates. The company's revenue fell 3% YoY, but still surpassed Wall Street expectations, coming in at $94.8 billion compared to the expected $92.6 billion. Additionally, Apple's adjusted earnings per share (EPS) beat estimates, with $1.52 versus $1.43 expected.
The company's iPhone sales of $51.3 billion were higher than the expected $48.9 billion, bucking the trend in the broader smartphone market. Competitor Qualcomm (QCOM) reported a 17% decline in second-quarter revenue, including a 17% decline in handset revenue, but Apple's iPhone sales were able to overcome this weakness.
However, Apple was not immune to the decline in PC and tablet sales, as Mac and iPad revenue fell compared to the same quarter last year, coming in at $7.1 billion and $6.6 billion, respectively. According to Gartner, worldwide shipments of computers fell 30% YoY in the first quarter of 2023, leading to declines in revenue for semiconductor giants Intel (INTC) and AMD (AMD), both of which reported significant declines in chip revenue.
Despite these challenges, Apple's wearables sales were strong, reaching $8.7 billion, exceeding the expected $8.5 billion. The company's services segment also performed well, with revenue of $20.9 billion, just shy of the expected $21.1 billion.
Following the earnings announcement, Apple's shares rose 2%. Looking ahead, the company is preparing to host its annual WWDC conference, where it is expected to showcase its highly anticipated AR/VR headset. While Apple has yet to confirm the existence of the device, it could provide the company with another revenue stream and establish it as a key player in the nascent market.
In conclusion, despite some challenges in the PC and tablet markets, Apple's strong iPhone sales and solid performance in its wearables and services segments have helped it surpass Wall Street's expectations in Q2 2023. The upcoming WWDC conference could also offer a glimpse into Apple's future revenue streams and its position in emerging markets like AR/VR.
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