Apple Earnings: First-Quarter Sales Are Up Despite Coronavirus Slowdown


The global economy is showing signs of collapse, yet Apple said that its sales continued to rise and that it was buying back another $50 billion in stock.

The tech giant has long been a bellwether for global industry, and investors will now hope that is still the case. Apple said on Thursday that its revenue rose nearly 1 percent to $58.3 billion in the first three months of the year, despite coronavirus lockdowns in China, where Apple assembles nearly all of its products and sells nearly a fifth of them.

Apple said it more than compensated for a 7.5 percent decline in revenue in China, Taiwan and Hong Kong with surging sales of its internet services, like iPhone apps and Apple Music, as well as the Apple Watch and AirPods.

Yet there are signs of a rougher path ahead. Analysts expect the current quarter to be much uglier because of the shutdowns across much of the world to combat the spread of the virus. “The supply chain is largely back up and running, but now the question is what kind of demand is there going to be for their products,” said Toni Sacconaghi, an analyst with Bernstein Research who tracks Apple.

Apple declined to forecast sales for the quarter, “given the lack of visibility and certainty in the near term,” Timothy D. Cook, Apple’s chief executive, said Thursday on an earnings call. “Over the long term, though, we have a high degree of confidence in the enduring strength of our business.”

April results and Apple’s expectations for the next two months suggest that the virus’s upheaval of modern life would pose some challenges to Apple’s business — and some benefits said Luca Maestri, Apple’s chief financial officer.

Apple showed some confidence by extending an aggressive pattern of stock buybacks, announcing it would repurchase another $50 billion of its stock, a potentially bold move at the likely outset of a recession.

Apple’s results easily beat Wall Street estimates, but the company’s profit still shrank 2.7 percent to $11.25 billion from a year prior, its fifth decline in profit in the last six quarters. Those declines are in part fueled by falling sales of iPhones, one of its highest-margin products. Apple said iPhone sales decreased 6.7 percent to roughly $29 billion, while revenue from Apple’s services and wearables businesses together grew by 18.4 percent to $19.6 billion.



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