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Investing.com - Apple posted fiscal second-quarter results that beat Wall Street estimates on better-than-expected iPhone sales amid improving performance in China, but revenue from its high-margin services business fell shy of estimates.
Apple (NASDAQ:AAPL) fell nearly 3% in premarket trading Friday.
For the three months ended Mar. 31, Apple reported earnings of $1.65 per share on revenue of $95.36 billion. Analysts polled by Investing.com had anticipated EPS of $1.63 on revenue of $94.22 billion.
iPhone sales, which account for nearly half of total revenue, rose 1% to $46.84B in Q1 from $45.96B a year earlier, beating estimates of $45.84B.
The better-than-expected iPhone revenue comes as performance in China improved. Apple’s sales in Greater China were down 2% to $16 billion, compared with an 11% fall in the prior-year quarter.
Apple’s services segment, including includes its Apple Pay and App Store offerings, increased year-on-year to $26.65 billion from $23.87B, missing Wall Street estimates of $26.7B.
Wearables, home and accessories generated $7.52B in revenue, missing estimates of $7.95B, while Mac revenue was $7.95B, topping estimates of $7.77B.
Looking ahead, Apple guided for fiscal third-quarter 2025 revenue to grow in the low-to-mid single-digit year-over-year range. The company did not provide a separate revenue outlook for its Services segment.
Apple announced a $100B stock buyback program, $10B less than the record $110B announced in the prior quarter, and hiked its quarterly dividend by 4% to $0.26 a share.
Following the report, Citi analysts lowered their estimates for fiscal 2025, 2026, and 2027, citing the impact of tariffs. They also trimmed their price target to $240 from $245.
“Apple’s fundamentals remain intact, and the company delivered decent results/guide in a tough tariff environment,” analyst Atif Malik said.
Citi maintained a Buy rating, noting that the stock continues to screen as defensive on price-to-free cash flow and return on invested capital relative to other members of the Magnificent Seven.
Wells Fargo (NYSE:WFC) analysts also reiterated their Overweight rating on Apple but noted that with shares trading at a high-20s P/E multiple based on their revised calendar 2026 EPS estimate of $7.70, they would expect the shares to “remain range bound until tariff uncertainties lift.”
Yasin Ebrahim contributed to this report.