Apple’s cash reserves drop to £153.47 billion at the end of the second quarter

Apple Inc. (NASDAQ: AAPL) released its quarterly financial results on Thursday that topped analysts’ estimates for earnings and revenue but the stock was reported over 2% down in after-hours trading. Second-quarter marks the period for Apple in which its supply and demand were massively weighed by the Coronavirus pandemic.

According to Refinitiv, analysts had anticipated Apple to print £43.41 billion in revenue in Q2 with a gross margin of 38.4%. In terms of earnings per share, they had estimated £1.80 per share in the recent quarter. In its report on Thursday, however, Apple recorded £46.41 billion in revenue (0.5% year over year increase) with a gross margin of 38.4%. The company reported to have made a higher £2.03 of adjusted earnings per share in the second quarter.

iPhone revenue declines 7% in Q2

At £23.05 billion, iPhone revenue came in 7% lower in Q2 on an annualized basis. The decline, however, was partially offset by Apple’s services segment that includes Apple Music, iCloud, and other subscriptions. Apple services generated £10.62 billion in revenue in the second quarter that marked a 16% increase as compared to the same quarter last year.

Apple also generated £4.26 billion in revenue from Mac, £3.47 billion from iPad, and £7.97 billion from home, wearables, and accessories in the second quarter.

Analysts are now expecting Apple to generate £41.03 billion in revenue in the third quarter with a gross margin of 38.5%. Apple also said on Thursday that it will continue to repurchase its stock during the health crisis and has expanded its share buyback programme by roughly £40 billion. The U.S tech giant also declared a 65 pence per share of dividend on Thursday.  

Apple does not offer guidance for Q3

According to CEO Tim Cook, the COVID-19 situation and its impact on Apple’s supply and demand makes it difficult to give meaningful financial guidance for the third quarter at this stage. The iPhone maker had also suspended its guidance for Q2 in February citing the Coronavirus pandemic.

The CEO further added that the company closed the second quarter with £153.47 billion in cash and cash equivalents versus £164.85 billion that it had at the end of Q1.

Including Thursday’s after-hours trading, Apple is less than 5% down year to date in the stock market. The company is valued at £1.03 trillion and has a price to earnings ratio of 23.20.