Apple (AAPL) earnings are out and it’s a beat on earnings but a miss on sales.
In its fiscal second quarter, Apple reported earnings per share of $2.10 on revenue of $52.9 billion. iPhone sales totaled 50.8 million during the quarter.
Wall Street analysts were looking for earnings of $2.02 per share on revenue of $53.1 billion, according to Bloomberg. iPhone sales were expected to hit 51.4 million.
Average selling price for iPhone hit $655 during the quarter, less than the $666 expected by Wall Street.
Following earnings shares of the company were down about 1.5%.
Apple said it expected third quarter revenue to come in between $43.5-$45.5 billion, less than expectations for third quarter guidance to be near $45.7 billion.
The company also raised its dividend 10.5% to $0.63 per share, and boosted its share buyback authorization to $210 billion. The company said it plans to return $300 billion to shareholders by the end of March 2019. S&P’s Howard Silverblatt noted that at $13.2 billion annually, Apple is now the world’s largest dividend payer.
In addition to its 50.8 million iPhones sold, which was down 1% from the same quarter last year, iPad sales fell 13% to 8.9 million units, while Mac sales rose 4% to 4.2 million units.
Apple, which has in recent quarter touted its services business, reported revenue from this unit of $7.04 billion during the quarter, up 18% against last year. The company’s “Other Products” segment, which includes Beats, Apple TV, and Apple Watch, among other things, reported revenue of $2.87 billion, up 31% against last year.
“We are proud to report a strong March quarter, with revenue growth accelerating from the December quarter and continued robust demand for iPhone 7 Plus,” said Tim Cook, Apple’s CEO, who added that, “we’re thrilled with the strong momentum of our Services business, with our highest revenue ever for a 13-week quarter.”
The second quarter is typically one of Apple’s softest quarters, coming after its big holiday quarter and lacking any major product announcements.
Yahoo Finance’s Dan Howley said ahead of the report that because most observers are focused on the next iPhone model, expected to come out this fall, Tuesday’s earnings would be “almost a non-issue.”
Howley added that, “The iPhone 8, or iPhone 10 or iPhone X, whatever Apple decides to call it, is expected to launch what analysts call a supercycle, a massive increase in sales due to consumers trading in their older handsets for a new device that many predict will be a major improvement over the iPhone 7 and 7 Plus.”
The fairly limited market reaction following these results backs up this analysis.
At $788 billion, Apple is the world’s largest public company by market cap.
Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland