Apple Q2 earnings: iPhone sales down 10%, $110 billion stock buyback announced

Apple Inc (NASDAQ: AAPL) is trading up in extended hours on Thursday after coming in ahead of Street estimates for its fiscal second quarter.

iPhone revenue fell short of expectations

The stock is gaining even though iPhone did not do all that well in Q2.

The flagship handset generated $45.96 billion in revenue in the recently concluded quarter (down 10% year-over-year) versus analysts at $46 billion. Tim Cook – the chief executive of Apple Inc said in a press release today:

On the plus side, services revenue at $23.90 billion topped consensus at some $630 million. $AAPL is now down just over 6.0% versus its year-to-date high.

Apple Q2 earnings snapshot

• Earned $23.64 billion versus the year-ago $24.16 billion
• Per-share earnings remained roughly unchanged at $1.53
• Revenue inched down 4.0% to $90.75 billion as per the earnings report
• Consensus was $1.50 a share on $90.01 billion in revenue

Apple Inc saw its gross margin come in at 46.6% for the second quarter quarter – in line with estimates. Luca Maestri, its chief of finance said today:

What else was noteworthy in $AAPL earnings release

• Mac revenue printed at $7.50 billion versus $6.86 billion expected
• iPad revenue came in at $5.60 billion versus $5.91 billion expected
• Other products generated billion in $7.90 sales versus $8.08 billion expected

Apple will likely offer guidance for its current quarter on the conference call that you can tune into on this link. Its chief executive also said on Thursday:

Apple boosts stock buyback

Also today, Apple authorised its biggest-ever stock repurchase of $110 billion. Last year, that authorisation stood at $90 billion.

The board declared 25 cents a share of quarterly cash dividend on Thursday as well - an increase of about 4.0%.

Note that our market analyst Ritesh A. recommends against buying $AAPL at current levels. Wall Street, however, currently has a consensus "overweight" rating on Apple shares.