Apple reports record fiscal Q2 iPhone sales and an all-time high in Services revenue

Apple released its fiscal second-quarter earnings report this afternoon and arguably the most important figure, iPhone revenue, came in better than expected. For the three months ended April 1, Apple generated $51.33 billion in sales of its most important product. That topped the $48.84 billion that Wall Street expected and the $50.57 billion in iPhone revenue that Apple took in during last year's fiscal Q2.

The increase came to 1.5% on an annual basis. The quarter included the release of the new yellow iPhone 14 and iPhone 14 Pro models and the revenue was the most ever recorded for the iPhone in any fiscal second quarter.

With COVID well in the rear-view mirror, iPad sales failed to top Wall Street forecasts and last year's figure. For the fiscal second quarter of 2023, iPad sales were $6.67 billion compared to the consensus forecast of $6.69 billion and last year's $7.65 billion. That works out to a 12.81% year-over-year decline. Services revenue, which increasingly has become an important revenue source for Apple, generated a record $20.91 billion in revenue, just a tad short of the $20.97 billion forecast by Wall Street. Last year Services took in $19.82 billion during the fiscal second quarter giving Apple a 5.5% increase this year.

Wearables, Home and Accessories, which includes the AirPods and the Apple Watch, saw revenue during the fiscal second quarter decline from $8.81 billion to $8.76 billion. Sales declined year-over-year in the Americas ($37.78 billion vs. $40.88 billion), Greater China ($17.81 billion vs. $18.34 billion), and Japan ($7.18 billion vs. $7.72 billion). Revenue for the quarter rose in Europe ($23.95 billion vs. $23.29 billion) and the rest of Asia Pacific ($8.12 billion vs. $7.04 billion).

"We are pleased to report an all-time record in Services and a March quarter record for iPhone despite the challenging macroeconomic environment, and to have our installed base of active devices reach an all-time high," said Apple CEO Tim Cook. "We continue to invest for the long term and lead with our values, including making major progress toward building carbon neutral products and supply chains by 2030."

For the fiscal quarter, Apple reported revenue of $94.84 billion beating expectations of $92.96 billion. However, it was 2.5% lower than the previous year's $97.28 billion. With a gross margin of 44.3%, net income was $24.16 billion vs. the $25.01 billion reported during last year's fiscal second quarter. Earnings per share came to $1.52 easily topping the $1.43 expected by analysts and matched last year's figure.

On Wall Street, Apple's shares declined $1.66 or .99% during regular trading to close at $165.79. After the report was released, Apple's shares were up $3.31 in after-hours trading (or 2%) to trade at $169.10. The 52-week high is $176.15 and the 52-week low is $124.17.