Apple sees iPhone sales slump 10% - the biggest drop since the pandemic. So why are shares up 7%?

02/05/2024

iPhone sales dropped 10 percent year-on-year in the first quarter of this year
But shares climbed as it announced it would repurchase $110 billion of stock
Sales fell 4 percent to $90.8 billion for the three months that ended in March

Apple on Thursday revealed its steepest quarterly decline in iPhone sales since the beginning of the Covid-19 pandemic, deepening a slump which is increasing pressure on the tech company.

iPhone sales dropped 10 percent year-on-year for the three months ending March 31 – the latest sign of weakness in a product that generates most of Apple’s revenue.

It marked the biggest drop in iPhone sales since the third quarter of 2020, when production bottlenecks caused by factory closures during the pandemic resulted in a delayed release of that year’s model.

However despite this slump, Apple’s shares climbed 7 percent in extended trading.

This was because the company announced that its board had authorized $110 billion in share buyback – a 22 percent increase over last year’s $90 billion authorization.

This is the largest in history, ahead of Apple’s previous repurchases, according to data from Birinyi Associates reported by CNBC.

apple sees iphone sales slump 10% - the biggest drop since the pandemic. so why are shares up 7%?

iPhone sales dropped 10 percent year-on-year for the three months ending March 31 – the latest sign of weakness in a product that generates most of Apple’s revenue

Buybacks help boost stock prices by rewarding investors with cash simply for holding stock in the company.

The current iPhone downturn was the main reason Apple’s revenue for the latest quarter decreased 4 percent from last year’s to $90.8 billion.

It marked the fifth consecutive quarter that Apple’s revenue dipped from the previous year.

The company’s profit in the past quarter totaled $23.64 billion, or $1.53 per share – a 2 percent dip from last year.

But the tech giant’s revenue and earnings per share came in slightly above analysts projections, according to FactSet Research.

Apple shares have fallen 10 percent so far this year, erasing about $300 billion in stockholder wealth.

Part of the iPhone deterioration during the first three months of the year stemmed from a big boost in sales during the same period last year when Apple said it was filling pent-up demand caused by pandemic-driven shipment delays.

This is a breaking news story. Updates to come.

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