Apple sees iPhone sales slump 10% – the biggest drop since the pandemic. So why are shares up 7%?

Apple on Thursday unveiled the steepest quarterly decline in iPhone sales since the start of the Covid-19 pandemic, deepening a slump that is increasing pressure on the tech company.

iPhone sales fell 10 percent year-over-year for the three months ended March 31 – the latest sign of weakness in a product that generates the bulk of Apple’s revenue.

It marked the biggest drop in iPhone sales since the third quarter of 2020, when production bottlenecks due to factory closures during the pandemic resulted in a delayed release of that year’s model.

Despite this slump, however, Apple shares rose 7 percent in extended trading.

This came as the company announced that its board of directors had authorized a $110 billion share buyback – a 22 percent increase from last year’s $90 billion authorization.

This is the largest in history, before Apple’s previous buybacks, according to Birinyi Associates data reported by CNBC.

Buybacks help increase stock prices by rewarding investors with cash simply for holding shares in the company.

The iPhone’s 10 percent decline (to $45.96 billion) was the main reason Apple’s revenue fell 4 percent in the last quarter from last year to $90.8 billion.

It marked the fifth quarter in a row that Apple’s sales decreased compared to the previous year.

The company’s profit for the quarter was $23.64 billion, or $1.53 per share – down 2 percent from last year.

But according to FactSet Research, the tech giant’s revenue and earnings per share came in slightly above analysts’ expectations.

Apple shares are down 10 percent so far this year, wiping out about $300 billion in shareholder wealth.

Part of the reason for the decline in iPhone sales stemmed from a large sales increase during the same three-month period in 2023, when Apple saw $5 billion in delayed iPhone 14 sales due to pandemic-related shipping delays.

“If you removed that $5 billion from last year’s results, we would have grown year-over-year this quarter,” Apple CEO Tim Cook told CNBC.

‘And that’s how we look at it internally, from the perspective of how the company is performing.’

“If you removed that $5 billion from last year’s results, we would have grown year-over-year this quarter,” Apple CEO Tim Cook told CNBC.

Apple shares rose 7 percent in extended trading after announcing it would buy back $110 billion in shares

Mac sales rose 4 percent to $7.45 billion, Apple announced.

Cook said sales were driven by new MacBook Air models released in March with an improved chip.

So-called “Other Products,” which is how the company reports sales of its Apple Watch and AirPods headphones, fell 10 percent year over year to $7.9 billion in the first quarter.

In the first quarter of this year, Apple released the Vision Pro virtual reality headset – its first new major category in years – but the device is expected to be sold in small quantities compared to other popular products.

“We’re just scratching the surface, so we couldn’t be more excited about our opportunity there,” Cook told CNBC.