AAPL Earnings: Apple posts strong results, $110 billion buyback

Shares of technology giant Apple (NASDAQ:AAPL) rose in after-hours trading after the company reported earnings for the second quarter of fiscal 2024. Earnings per share came in at $1.53, beating analysts’ consensus estimate of $1.50 per share. Revenue fell 4.3% year over year, with sales reaching $90.8 billion. This exceeded analyst expectations by $190 million.

The iPhone generated $45.96 billion in revenue, while iPad and Services revenues contributed $5.56 billion and $23.87 billion, respectively. Additionally, the Wearables, Home and Accessories segment posted revenues of $7.91 billion, while Mac revenues were $7.45 billion.

Impressively, Apple announced a massive $110 billion buyback plan while raising its quarterly dividend by 4% to $0.25 per share. Furthermore, the company tends to spend about $21 billion per quarter on buybacks, as shown in the image below. If Apple uses up the entire $110 billion by 2024, the average will be about $27.5 billion per quarter, which would be a significant jump from the past three years. It also represents more than 4% of the total market capitalization, based on today’s closing price of $173.03 per share.

Chinese sales exceeded expectations

There have been a lot of concerns lately about Apple’s performance in China. Heightened competition and economic headwinds have caused the company’s sales in the country to fall 8.1% year-on-year to $16.37 billion. Nevertheless, this exceeded analyst expectations of $15.87 billion. China is a very important market for Apple, as it accounts for almost a fifth of its sales.

Is AAPL Stock a Buy?

As for Wall Street, analysts have a Moderate Buy consensus rating on AAPL stock, based on 18 buys, 11 holds, and two sells in the last three months, as shown in the chart below. After a 10% decline since the beginning of the year, the average AAPL price target of $200.37 per share implies an upside potential of 15.75%. However, it’s worth noting that estimates are likely to change after today’s earnings report.