After beating earnings estimates on Monday, Apple CEO Tim Cook said the U.S. and China symbiotic relationship will prove to be to important to wipe out, adding that he was “very optimistic” about the Trump Administration avoiding a trade war with the Chinese.
Cook said he was “optimistic” that the two sides will not install a blanket tariff regime on important tradable goods. China is an important market for Apple. The company reported 21% revenue growth in mainland China in its second quarter, their best quarterly growth rate in nearly three years. Cook suggested that iPhone sales were near record breakers in China. Shares of Apple Inc. rose 3% on Wednesday after the company’s quarterly report and current-quarter iPhone sales forecast calmed investor nerves about a potential slowdown in sales of its flagship product.
Shares in the Cupertino, California firm had fallen 5%, or more than USD 40 billion in market value, in the two weeks before the report, thanks largely to a soft outlook from Taiwan Semiconductor Manufacturing Co Ltd which was read as pointing to weak demand for iPhones.
Yet while investors were bracing for weak smartphone sales, Apple sold 52.2 million iPhones, just shy of analysts’ estimate of 52.3 million.
The USD 999 iPhone X, which features an edge-to-edge display and facial recognition technology to unlock the phone, has been plagued by supply bottlenecks and concerns about weak sales since it went on sale in November in the United States.
Apple also promised to hike its dividend by 16% compared with a 10.5 percent increase last year and to buyback USD 100 billion worth of additional stock, which analysts said would create a floor for shares.
Apple bought USD 23.5 billion of stock in the March quarter. Analysts believe the heavy emphasis on buybacks will bolster share prices, but some investors wished Apple had found different uses for the cash.
The cash Apple earmarked for stock buybacks is about twice the $50 billion market capitalization of electric car maker Tesla Inc.
Apple posted revenue for its March quarter of USD 61.1 billion, up from USD 52.9 billion last year. Wall Street expected USD 60.8 billion, according to Thomson Reuters.
After a solid quarter that quashed most concerns about a slowdown, eyes will now turn to the next generation of iPhones to be launched in September.
Apple will launch an iPhone X plus type combined with new improved features for the current sized iPhone X product, Apple’s iPhone franchise will extend strong sales of higher-priced iPhones through
Apple shares were trading at USD 175.60 on Wednesday morning.