Shares in the company are up nearly 7% to US$214.32 in New York after the tech giant beat forecasts with its second-quarter results and lifted guidance for the next three months.
The share price rise comes after Apple reported revenue of US$58.0bn in its second quarter ended 31 March, better than the US$57.5bn analysts had been expecting.
That was despite a slump in iPhone sales, which plunged 17% year-on-year to US$31bn.
Sales of Apple’s flagship product started to pick up in the final few weeks of March though, as price cuts in China, lower Chinese taxes and new financing deals boosted demand.
Given the improvement, chief executive Tim Cook lifted third quarter revenue guidance to between US$52.5bn-54.5bn, ahead of the US$52bn analysts had pencilled in, but well below the US$61.1bn Apple raked in last year.
Second quarter profits fell to US$11.5bn compared to US$13.8bn in the same period a year ago.
Revenue from Apple’s services division, which the company is investing heavily in to offset falling phone sales, rose to US$11.4bn versus US$9.8bn in the same quarter of 2018.
The quarterly dividend was upped to US$0.77, while the board also authorised an additional US$75bn share buyback programme.
Sigh of relief for investors
“Apple delivered better than expected headline numbers for its FY2Q (March) results which will be a major sigh of relief for investors and give the bulls another feather in their cap heading into the next few quarters,” said Wedbush analyst Daniel Ives.
“In a nutshell, the company beating the Street and most importantly guiding stronger for June will put ‘major fuel in the engine’ for the bulls [on Wednesday] morning and ultimately put shares on a path to make new highs in our opinion over the next three to six months.”
Hargreaves Lansdown analyst George Salmon added: “It was always going to be a tough one for iPhones.
“The real news for investors in these numbers is the robust performance from Apple’s new growth drivers, namely the Services business and Wearables.
“Add in the unexpected dividend hike and the fact Tim Cook hinted the situation in China could be improving, which will fuel hopes the iPhone slump may not be as bad as first thought, and there’s plenty of positives for investors.”