Apple (NASDAQ: AAPL) reported yet another quarter of disappointing product sales as it announced second-quarter earnings results on Tuesday, primarily hurt by weakness in China. Revenue from Apple products fell 9% year-over-year to $46.6 billion.

iPhone sales fell 17% during the quarter to $31.05 billion.

iPhone maker Apple tops Q2 estimates despite weak product sales

 

The weakness in its flagship product pulled the overall revenues down 5% to $58 billion. However, this still came in above the street consensus of 57.6 billion. International sales accounted for 61% of the quarter’s revenue.

Earnings fell 10% to $2.46 per share, while analysts had projected it at $2.37 per share. The better-than-expected earnings sent AAPL shares up 4.2% during after-market trading on Tuesday.

Lucrative services

Meanwhile, Apple’s services segment slightly offset the weakness in the products side with a 16% year-over-year growth to $11.45 billion, an all-time high.

Apple has been witnessing tremendous success with its services segment, where revenue growth has exceeded that of products in five out of the past six quarters.

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Apple CEO Tim Cook said, “Our March quarter results show the continued strength of our installed base of over 1.4 billion active devices, as we set an all-time record for Services, and the strong momentum of our Wearables, Home and Accessories category, which set a new March quarter record.”

Apple Products vs. Services Performance - 2Q19

At a March 25 Apple event, the tech giant had released updates to some of its services, besides teasing its much-touted streaming service Apple TV+. The iPhone maker has hired an enviable panel of film personalities including Steven Spielberg to create content for its streaming service, in a bid to take on Netflix, Amazon Prime Video, Hulu and Disney+.

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Outlook

For the third quarter of 2019, the iPhone maker expects revenue between $52.5 billion and $54.5 billion. Gross margin is projected to be in the range of 37-38%.

Dividend

Apple board has declared a cash dividend of $0.77 per share, an increase of 5%. The dividend is payable on May 16, 2019, to shareholders as on May 13, 2019.

AAPL shares have gained 27% in the year year-to-date period and 22% in the trailing 52 weeks.

 

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