SAN FRANCISCO: Apple on Tuesday reported resilient iPhone sales in the face of waning global demand and promised $100 billion in additional stock buybacks, reassuring investors that its decade-old smartphone invention had life in it yet.
Apple’s quarterly results topped Wall Street forecasts, which dropped ahead of the report on growing concern over the iPhone. The Cupertino, California-based company also was more optimistic about the current quarter than most financial analysts, driving shares up 3.6 percent to $175.25 after hours.
Suppliers around the globe had warned of smartphone weakness, playing into fears that the company known for popularizing personal computers, tablets and smartphones had become too reliant on the iPhone.
Sales of 52.2 million iPhones against a Wall Street target of 52.3 million was a comfort and up from 50.7 million last year, according to data from Thomson Reuters.
Apple bought $23.5 billion of stock in the March quarter, and said it planned to hike its dividend 16 percent, compared with a 10.5 percent increase last year. Analysts believe the heavy emphasis on buybacks will bolster share prices, but some investors wished Apple had found different uses for the cash.
“I’d hoped for more on the dividend side or maybe a strategic investment,” said Hal Eddins, chief economist for Apple shareholder Capital Investment Counsel. “I assume Apple can’t find a strategic investment at the current prices that will move the needle for them. The $100 billion buyback is good for right now but it’s not exactly looking to the future.”
The cash Apple earmarked for stock buybacks is about twice the $50 billion market capitalization of electric car maker Tesla Inc.
Apple posted revenue for its March quarter of $61.1 billion, up from $52.9 billion last year. Wall Street expected $60.8 billion, according to Thomson Reuters.
Average selling prices for iPhones were $728, compared with Wall Street expectations of $742. The figure is up more than 10 percent from $655 a year ago, suggesting Apple’s iPhone X, which starts at $999, has helped boost prices.
Analysts had feared the high price was muting demand for the iPhone X, but Apple Chief Executive Tim Cook said it was the most popular iPhone model every week in the March quarter.
“This is the first cycle that we’ve ever had where the top of the line iPhone model has also been the most popular,” Cook said during the company’s earnings call.
“It’s one of those things like when a team wins the Super Bowl, maybe you want them to win by a few more points. But it’s a Super Bowl winner and that’s how we feel about it.”
The iPhone X has shaped up to be “a good, not a great product. There was a time prior to its introduction that investors expected it to be a great product,” said Thomas Forte, an analyst with D.A. Davidson Companies.
“Now that we know it is a good product, as investors have lowered expectations, that is enough, in my view, for shares to go higher from current levels.”
Apple also predicted revenue of $51.5 billion to $53.5 billion in the June quarter, ahead of the $51.6 billion Wall Street expected as of Monday evening, and the share repurchases in the March quarter drove Apple’s cash net of debt down slightly to $145 billion.
“We are returning the cash to investors as we have promised,” Chief Financial Officer Luca Maestri told Reuters in an interview.
Profits were $2.73 per share versus expectations of $2.68 per share, as of Monday, and up from $2.10 a year ago.
Apple’s services business, which includes Apple Music, the App Store and iCloud, posted $9.1 billion in revenue compared with expectations of $8.3 billion. Heading into earnings, investors were hopeful that growth in that segment could help offset the cooling global smartphone market.
Julie Ask, an analyst with Forrester, said Apple’s services segment results were positive but warned that Apple needed to continue to boost subscriptions on its platforms, which reached 270 million users in the March quarter and includes people who subscribe to third-party apps on the iPhone as well as Apple’s own services like iCloud.
“Apps are carrying most (services revenue) right now, but Apple needs to get to a place where it’s mostly subscriptions and monthly fees and not just one-off downloads,” Ask said.
Apple traditionally updates its share buyback and dividend program each spring, and the $100 billion it added this year compares with an increase of $50 billion last year.
Apple surprises with solid iPhone sales, announces $100 billion buyback
Apple surprises with solid iPhone sales, announces $100 billion buyback
- Apple’s quarterly results topped Wall Street forecasts, which dropped ahead of the report on growing concern over the iPhone
- Profits were $2.73 per share versus expectations of $2.68 per share
Pakistan hopes to get new IMF loan by early July, says finance minister
- Pakistan’s current $3 billion financial arrangement with IMF expires in late April
- Islamabad is seeking “bigger,” long-term loan to ensure macroeconomic stability
Pakistan is hoping to reach a staff-level agreement with the International Monetary Fund by June or early July, its finance minister said on Tuesday.
The country’s current $3 billion arrangement with the fund runs out in late-April, which it secured last summer to avert a sovereign default.
Islamabad is seeking a long-term bigger loan to help bring permanence to macroeconomic stability as well as an umbrella under which the country can execute structural reforms.
“We are still hoping that we get a staff-level agreement by June or early July,” Finance Minister Muhammad Aurangzeb told a conference in Islamabad.
He returned from Washington last week after leading a team to attend the IMF and World Bank’s spring meetings. “We had very good discussions in Washington,” he said.
He said he did not know at this stage the volume and tenure of the longer program.
Riyadh prepares to host special meeting of World Economic Forum
- The aim of the gathering is to find solutions to global challenges relating to humanitarian issues, the climate and the economy
RIYADH: Final preparations are taking place this week in the Saudi capital, Riyadh, for a special meeting of the World Economic Forum in the city on April 28 and 29.
Heads of state and senior executives from the public and private sectors are expected to be among the participants, who will discuss a range of global economic issues and developments under the theme “Global Collaboration, Growth and Energy for Development.”
The aim of the meeting is to find solutions to a host of global challenges relating to humanitarian issues, the climate and the economy. On the sidelines of the main event, the Kingdom will host exhibitions and other events to highlight the latest developments and trends in areas such as sustainability, innovation and culture.
The selection of Riyadh as host of the special meeting reflects the extensive partnership between Saudi Arabia and the WEF, officials said.
It builds upon the Kingdom’s active participation and contributions to the WEF’s Annual Meetings in Davos.
The agenda is designed to rekindle the spirit of cooperation and collaboration with various panel discussions, workshops, and networking opportunities. It represents a significant gathering of global leaders and experts dedicated to forging a path toward a more resilient, sustainable, and equitable world.
ACWA Power inks deal to drive renewable energy development in Azerbaijan
RIYADH: Saudi energy giant ACWA Power is signing a new agreement to accelerate the development of renewable projects in Azerbaijan.
The private water desalination company, known for its extensive green hydrogen storage capacity, announced it has now finalized an agreement with SOCAR, the State Oil Company of the Azerbaijan Republic.
This development follows an initial cooperation understanding signed in February 2023.
This deal focuses on the joint evaluation of the “Low-Carbon/Green Fertilizer” project, in which the two bodies will collaborate on assessing the production of green hydrogen to support the decarbonization of SOCAR downstream assets.
Marco Arcelli, CEO of ACWA Power, said in a statement, “I am proud to announce our collaboration with SOCAR to ignite a new era of renewable energy development in Azerbaijan. With our shared vision and commitment to sustainability, this partnership will not only drive innovation but also pave the way for a cleaner and brighter future for this country.”
The primary directive of the agreement will be to enhance SOCAR’s carbamide fertilizer facility, striving toward more value-added low-carbon products.
As part of the project, SOCAR and ACWA Power will conduct feasibility studies to assess the potential production and sale of green fertilizers, aligning with Azerbaijan’s vision of achieving a clean environment.
ACWA Power will take a role in driving the project’s renewable energy and green hydrogen production aspects, bringing their expertise to bear on this initiative.
For his part, Anar Mammadov, vice president of SOCAR, said, “Azerbaijan is committed to building a sustainable future, and our partnership with ACWA Power underscores our shared dedication to driving renewable energy development in the region. Together, we will work towards realizing our vision of a cleaner, greener Azerbaijan.”
He added: “The cooperation with ACWA Power represents a significant step forward in Azerbaijan’s transition towards a low-carbon economy and underscores the commitment of both organizations to sustainable development practices.”
Preceding this announcement, the two nations posed their intent to collaborate on renewables as Saudi Arabia’s Minister of Energy Prince Abdulaziz bin Salman met with Azerbaijan’s Minister of Environment and Natural Resources Mukhtar Babayev in March.
During the meeting, the counterparts discussed opportunities for work and cooperation between their two countries in the field of climate change.
They also talked about joint efforts to achieve the goals of the UN Framework Convention on Climate Change and the Paris Agreement, the Kingdom’s ministry said in a statement at the time.
Closing Bell: TASI edges down to close at 12,509 points
RIYADH: Saudi Arabia’s Tadawul All Share Index closed at 12,508.93 points on Monday, losing 9.29 points or 0.07 percent.
The parallel market, Nomu, also shed 343.96 points or 1.28 percent to end the day’s trading at 26,596.22.
Concurrently, the MSCI Tadawul 30 Index fell 3.95 points or 0.25 percent to finish at 1,567.16.
The main index posted a trading value of SR8.8 billion ($2.3 billion), with 74 stocks advancing and 148 declining. On the other hand, Nomu reported a trade volume of SR37.7 million.
Al-Rajhi Company for Cooperative Insurance was the top performer on TASI as its share price surged 9.93 percent to SR126.20. LIVA Insurance Co. followed next with its share price jumping 9.92 percent to close at SR21.50.
Gulf General Cooperative Insurance Co. also performed well, climbing 9.16 percent to SR16.44. Raydan Food Co. and Fitaihi Holding Group increased 8.14 and 8.11 percent to SR28.55 and SR4.40, respectively.
Conversely, Saudi Cable Co. recorded the most significant dip, declining 4.94 percent to SR75.
Alkhaleej Training and Education Co. and Ash-Sharqiyah Development Co. also experienced setbacks, with their shares dropping to SR31.50 and SR23.40, reflecting declines of 4.83 and 4.10 percent, respectively.
Nomu’s top performer was Dar Almarkabah for Renting Cars Co., which saw a 9.73 percent jump to SR44. Mayar Holding Co. and Alqemam for Computer Systems Co. also recorded notable gains, with their shares closing at SR4.27 and SR89.80, marking an increase of 7.02 and 5.03 percent, respectively. Arabian International Healthcare Holding Co. and Foods Gate Trading Co. also fared well.
On Nomu, Raoom Trading Co. was the worst performer, declining by 7.28 percent to SR135. Other underperformers included Natural Gas Distribution Co. and National Environmental Recycling Co., whose share prices dropped 5.58 percent and 5.23 percent to SR42.30 and SR12.32, respectively.
Watani Iron Steel Co. and Future Care Trading Co. declined during the day to settle at SR2.81 and SR8.70, respectively.
Saudi Aramco in talks to acquire 10% stake in China’s Hengli Petrochemical
RIYADH: Energy giant Saudi Aramco held talks with Chinese Hengli Group Co. to acquire a 10 percent stake in its subsidiary, subject to due diligence and required regulatory clearances.
Aramco and Hengli Petrochemical Co. signed a memorandum of understanding for the proposed deal. The agreement supports the former’s strategy to increase its presence in key downstream markets, enhance its liquids-to-chemicals initiative, and ensure long-term crude oil supply agreements.
Last year, Aramco signed two multibillion-dollar agreements for liquids to chemicals investments in China.
In March 2023, a deal was signed between China’s Norinco Group and Panjin Xincheng Industrial Group to establish a joint venture to build a refinery and petrochemical complex in China’s Liaoning province. The initiative cost stands at approximately $12 billion.
The second agreement, signed in July, is an acquisition of a 10 percent stake in China-based firm Rongsheng Petrochemical Co. for $3.4 billion.
“This MoU supports our efforts to grow our global downstream footprint. We continue to explore new opportunities in important markets as we seek to progress in our liquids-to-chemicals strategy,” Mohammed Al-Qahtani, Aramco’s downstream president, said in a press release.
He continued: “We look forward to forging new partnerships and are excited by the prospect of expanding our presence in the important Chinese market.”
Hengli Petrochemical, a controlled subsidiary of Hengli Group, owns and operates a 400,000-barrel-per-day refinery and integrated chemicals complex in Liaoning province, and several plants and production facilities in Jiangsu and Guangdong provinces.
Speaking at a development forum held in March 2023 in Beijing, Amin Nasser, president and CEO of Aramco, highlighted substantial opportunities for cooperation between Saudi Aramco and Chinese partners in sectors aimed at reducing emissions.
“China has distinct strengths in renewables and critical materials, while Aramco and Saudi Arabia have a clear interest in solar, wind, hydrogen, and electrofuels. These areas have great long-term potential, and combining our strengths could match our ambitions,” he noted.
Saudi Arabia and China are working together to strengthen their already well-established strategic ties.
In September, the Kingdom’s minister of industry and mineral resources held meetings with key Chinese officials in Beijing. Bandar Alkhorayef also toured various companies and factories in different Chinese cities as part of his trip.
He held talks with China’s Vice Minister of Commerce Wang Shouwen, during which they discussed ways to boost economic collaboration and trade ties, the Saudi Press Agency reported.
The top officials also discussed investment opportunities in several economic sectors, including mining. At the time, the Saudi minister highlighted the Kingdom’s progress in the field of industries and mining.
