Apple forecast beats Wall Street estimates as iPhone demand stabilises

Apple projected quarterly sales that topped analysts’ estimates, suggesting demand for iPhones has stabilised after a disappointing holiday period. Shares of the mobile technology giant rose about 5 per cent in extended trading.

The company also reported Services revenue grew 16 per cent as consumers sign up for an expanding smorgasbord of digital subscriptions. That was just ahead of Wall Street expectations. A new buyback plan also helped.

“IPhone clearly was in line or a little bit above expectations,” said Shannon Cross, an analyst at Cross Research. “Given how conservative people were going into the quarter, that is why you’re seeing a positive reaction in the stock market.”

The Cupertino, California-based company said Tuesday that fiscal third-quarter revenue will be between US$52.5 billion and US$54.5 billion. Analysts, on average, were looking for US$52.2 billion, according to data compiled by Bloomberg. Fiscal second-quarter results also beat Wall Street expectations.

Apple shares have surged more than 40 per cent from a 21-month low in early January after lacklustre iPhone sales prompted the company to cut its holiday revenue forecast. The stock fell 1.9 per cent to close at US$200.67 in New York earlier on Tuesday.

Fiscal second-quarter sales fell 5.1 per cent from the period a year ago to US$58 billion. Analysts estimated US$57.5 billion, according to Bloomberg data. Apple had forecast revenue between US$55 and US$59 billion. That was the second straight quarter of revenue declines.