Apple, Q2, Revenue

Apple reported the second-best second quarter in its history but investors expressed some disappointment, sending its share price down as much as 2.4% in after-hours trading Tuesday.

Apple’s revenue rose 4.6% to $52.9 billion while earnings per share improved to $2.10 from $1.90 in the year-ago quarter. Analysts on average had expected earnings of $2.02 per share on revenue of $53.02 billion.

The company sold 50.76 million iPhones, down from 51.19 million a year earlier but a reasonably solid performance as consumers look ahead to the launch of the 10th-anniversary edition of its most important product later this year.

“We are proud to report a strong March quarter, with revenue growth accelerating from the December quarter and continued robust demand for iPhone 7 Plus,” CEO Tim Cook said in a news release, adding that Apple’s services business posted its highest revenue ever for a 13-week quarter.

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The services business includes digital content sold on the App Store or iTunes. Its revenue rose 18% to $7.0 billion, beating estimates of $6.78 billion.

But the results apparently underwhelmed investors, as Apple’s share price fell 0.6% to $147.51 in regular trading on Tuesday and then dropped as much as 2.4% to $143.86 after hours. Analysts on average had estimated iPhone sales of 52.27 million.

“There is a general softening in phone demand to contend with as well as expectations of a big upgrade, all of which softens the blow of this quarter’s miss,” James McQuivey, a Forrester Research analyst, told Reuters.

“If we see Apple downplaying expectations before the next upgrade cycle, it might mean that the company isn’t confident it will beat those expectations,” he added.

Quartz suggested that when Apple “unveils a new iPhone that doesn’t look like the last three models it’s released, sales will spike once more. Regardless, Apple is still selling a lot of smartphones even in traditionally quiet periods, and there’s no indication that this is going to change any time soon.”

The company forecast total revenue of between $43.5 billion and $45.5 billion for the current quarter, while analysts on average were expecting $45.60 billion.

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