Key Takeaways
Apple Inc. projected third-quarter revenue growth of 14% to 17% from a year earlier, a forecast that far outpaces the 9.1% growth analysts had estimated.
The blockbuster guidance comes as investors watch a major leadership transition. "These will be big shoes to fill and the timing of Cook exiting stage left as CEO could make sense but also creates questions," said Wedbush Securities analyst Dan Ives, regarding the handover to John Ternus.
The company said on its analyst call that it expects third-quarter services revenue to see a similar growth rate as the second quarter's 14% increase. The guidance follows a strong fiscal second quarter where Apple's revenue climbed to $109.46 billion, beating estimates, and iPhone revenue jumped 21% to $56.5 billion.
The surprisingly strong outlook suggests demand for Apple's products remains robust despite a leadership change and rising component costs. Options traders have turned bullish, with one measure of downside risk falling over 50% in the past five weeks, according to data from RiskDex.
Apple also said it is no longer pursuing a net cash neutral position, a significant shift from its long-held capital allocation strategy that could imply changes to its share buyback and dividend programs.
The guidance signals management's confidence that demand will remain strong through the summer. Investors will now watch for details on the new capital return policy and for any AI-related announcements at the company's Worldwide Developers Conference in June.
This article is for informational purposes only and does not constitute investment advice.
