Apple Inc.
managed to sell a decent number of iPhones this winter. That was hardly a foregone conclusion. 

Revenue from the popular smartphone family rose 2% year over year to $51.3 billion for Apple’s fiscal second quarter, which the company reported on Thursday—a pleasant surprise for investors, as Wall Street had been predicting a 4% decline. And because the iPhone still drives more than half of Apple’s top line, the upside was enough to bring the company’s total revenue to $94.8 billion, which was about 2% ahead of analysts’ estimates. 

Still, Apple is far too big to escape the weight of the slowing global economy. iPad and Mac revenue both experienced double-digit declines, while wearables revenue also slipped a bit during the March quarter. Service revenue rose 5% year over year to $20.9 billion, which was in line with Wall Street’s expectations but also the third consecutive quarter of mid-single-digit growth for what is now Apple’s second-largest segment. Hence, Apple’s total revenue fell 3% year over year after a 5% decline in the December period—the first time in four years that the company has posted two straight quarters of declines. 

The company said on its conference call that it expects a similar revenue performance in the June quarter, implying a miss relative to the slight year-over-year revenue gain Wall Street had been expecting for the period. Still, Apple’s shares rose more than 2% in after-hours trading following the results announcement, which also included a 4% dividend raise and a new $90 billion share-buyback program. Apple’s stock had also lost 1% during the regular session Thursday after
—which supplies modem chips for the iPhone—issued a more downbeat projection for the June quarter. 

In all, the results reflected a relatively drama-free period for Apple, which had spent the previous quarter swept up in the tumult of China’s domestic politics. Harsh Covid lockdowns sparked social unrest that hobbled Apple’s production in the country that makes nearly all of its devices. Apple is slowly working to diversify its manufacturing footprint, but that will take quite some time. Meanwhile, the company is expanding its presence in relatively untapped markets such as India, where it opened two of its retail stores last month. 

Apple investors, meanwhile, are becoming increasingly keen on what is coming next. The company is widely expected to lift the wraps on a new augmented/virtual reality device at its developers conference early next month. That would mark Apple’s first foray into a product category that has so far mostly racked up misfires. But Apple’s shares are now up 28% year to date, the stock’s biggest gain between the start of the year and its fiscal second-quarter earnings report since 2012. That one more thing can’t afford to be a flop. 

Write to Dan Gallagher at