Apple shares spiked more than 5 percent Tuesday after the iPhone maker said sales in China are bouncing back — bringing the tech giant back to the brink of a $1 trillion market cap.
Apple offset news of a quarterly sales decline Tuesday with strong forecasted third-quarter revenue that beat analyst expectations — backed by chief executive Tim Cook saying that the company’s China sales problem may finally be letting up thanks to its generous iPhone price cuts.
“Our trade-in and financing programs that we implemented in our retail stores have been really well-received there,” Cook said on a call with investors, adding that the improved trade relationship between the US and China in recent weeks have improved Chinese consumer confidence.
“We certainly feel a lot better than we did 90 days ago,” Cook said, referring to Apple’s drastic January revenue warning which blamed weak Chinese demand for the company’s revenue woes.
Shares of Apple were up 5.0 percent in extended trading Tuesday, at $210.79. The magic number for a $1 trillion market cap is just over $212.
Also boosting the stock was Apple’s announcement that it will be boosting its share buyback program by $75 billion, and increasing its quarterly dividend to 77 cents per share, up from 73 cents a share.
Revenue for the three months ended in March fell 5 percent from the same time last year to $58 billion, the company said in its earnings report Tuesday. That downturn followed a 5 percent drop in the previous quarter.
It’s the first time Apple has suffered two consecutive quarterly revenue declines in two-and-half years.
The Cupertino, Calif.-based juggernaut beat analyst expectations for earnings per share, however, bringing in $2.46 a share the quarter against the predicted $2.36.
Apple said iPhone sales dipped 17 percent year-over year, bringing in $31.1 billion in revenue.
A day after Spotify announced that it had reached 100 million paying users, Apple reported that its services revenue — which includes its Apple Music subscribers as well as sales in the App Store — reached $11.5 billion. Analysts had forecasted $11.3 billion.
Investors are looking to Apple’s services business to fuel growth as iPhone sales slow. Last month, the gadget maker revealed a new credit card offering and subscription services for news, television and gaming, though only the news subscription is currently available to purchase.
Apple on Tuesday said it has 390 million total subscribers to both its own and third-party services on its devices. The company has set a goal of 500 million by 2020.
Apple also beat analyst expectations for its wearable business, bringing in sales of $5.1 billion compared with estimates of $4.8 billion.
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