Apple Reports Mixed Quarterly Results

Apple Inc. posted its first back-to-back drop in quarterly sales and profit in more than two years, but the tech titan reported strength beyond its struggling iPhone business and said a sharp downturn in China showed signs of easing.

According to The Wall Street Journal, Pprofit dropped 16% to $11.56 billion for the three months through March 30, while revenue slid 5% to $58.02 billion, Apple said Tuesday.

WSJ Graphic

Sales of the iPhone, long the biggest driver of its business, fell 17% to about $31 billion—an accelerated decline for a product that has been hobbled by smartphone owners holding on to devices longer and by competition from rivals in China offering lower-price, feature-rich handsets.

The company’s results exceeded analysts’ expectations, which had ebbed following a surprising slump in the previous quarter. Chief Executive Tim Cook highlighted glimmers of hope in problem areas including China, where he said customers have reacted positively to Apple’s move to lower iPhone prices and offer financing programs.

Apple also blunted the damage from its iPhone business by extending the robust growth of services like app sales and streaming-music subscriptions, which collectively jumped 16%. It also said it would add $75 billion to its continuing share-buyback program.

Investors have largely shrugged off the iPhone troubles and focused on Apple’s potential to generate billions of dollars in revenue by selling subscriptions across the more than 900 million iPhones world-wide. They also were encouraged that the company struck a multiyear agreement in April with Qualcomm Inc. for smartphone modem chips that should allow Apple to deliver an iPhone in 2020 with speedier, 5G wireless technology.